Cautious optimism as Nelson-Tasman economy ‘turning a corner’
Growth in the September quarter shows the Nelson Tasman economy is “starting to turn a corner”, a new economic report says.
But, while the good news is being welcomed, it carries cautious undertones, as the report also warns that “the recovery will take time, especially with a series of recently announced business closures”.
While the Infometrics Quarterly Economic Report for September 2025 showed GDP growth of 1.4% in the September quarter, year-on-year growth shrank 0.3%, slightly better than the national decline of 0.5%.
Nelson Regional Development Agency chief executive Fiona Wilson said the report offered a “very welcome opening line” with the statement the region was turning a corner.
But, it did not hide the challenges also identified in the report, she said.
“Coming off the back of subdued activity means that economic activity across the 12 months to September 2025 was still 0.3% below where it was a year ago, it is nevertheless a much more encouraging opening line than previous few quarters.”
Highlights of the report include an “encouraging uptick in guest nights in the September 2025 quarter” of 3.1% – the strongest growth since 2023.
Domestic visitor nights rose 4.7%, also the strongest since 2023, which made up for “softness” in international visitors, the report said.
Wilson said it was “good news”.
“It seems that domestic travellers showed solidarity with Nelson-Tasman through the winter months by continuing to visit the region after the severe weather events.”
She hoped the messaging, along with the regional promotion boost from the Government post the floods, would help reduce the predicted $18 million annual loss of visitor spend calculated immediately post floods.
In an independent review of the results, economist Benje Patterson said the confidence to travel to the region was “supported by strong advocacy work by Nelson-Tasman leaders to firmly present the message that the region was open for business”.
Further marketing campaigns and an anticipated 15% increase to international visitor arrivals through Christchurch Airport this summer “bode well for further growth in Nelson Tasman’s visitor economy over the summer months”, he said.
Wilson said it had been a tough year with the June and July floods making the September improvement “especially pleasing”.
But, she warned there could be an “unfortunate perverse outcome” from the storm damage, where the immediate clean-up and repairs led to a temporary spike in economic activity.
“While the businesses supporting the repair work will be welcoming the activity, there may be a lull afterwards as it will take time for crops and livestock on the damaged land in the primary sector to get back to full production.”
The report also showed that employers were continuing to “shed workers”, she said.
Employment fell 1.7% over the past 12 months, with a 0.4% decline in the September quarter. Those numbers do not include the impact of recently announced business closures.
Despite the job losses unemployment remained low at 3.4%, compared to 5.2% nationally.
Wilson said that came from “pros and cons”, as low unemployment was driven in part by a lack of population growth.
“Plus our rapidly ageing population meaning there are also fewer people of working age.”
In the past year the working age population in the region shrank by 400, but the 65+ age group grew by 800.
The smaller workforce meant there were still job opportunities, Wilson said.
“Looking to the future, relative scarcity of workers will create ongoing hiring challenging for businesses that will need to be addressed through a combination of labour saving investments to improve productivity, as well as recruitment from further afield.“
While Wilson was cautious about referring to “green shoots”, there were a few starting to appear, including the “sharp increase” in non-residential construction, with $169m consented in the past year, she said.
“The construction sector has a significant pipeline of work under way given a large volume of storage and warehousing consents earlier in the year, coupled with hospital redevelopment work, and ongoing flood repair work.”
When it comes to the cost of living, locals were continuing to “play it safe”, with consumer spending down 0.3% in the year to September, and car registrations at a 13 year low, the report said.
Rising rents were also adding pressure, with rents now amounting to 26 of average income, making it the most expensive region to rent in.
Meanwhile, the housing market “remains muted”, with a 0.3% decline in values in the September quarter, and “little interest” in new builds, the report said.
“New real estate listings continue to outnumber house sales, applying downward pressure on values.”
By Katie Townshend, Nelson Mail
This Post Has 0 Comments