Our city has been in recession for three years. It began in 2022 with the cost- of-living crisis when inflation topped 7%. It was compounded in Nelson by the August ’22 storm destroying homes, wrecking infrastructure and disrupting our main highway for months.
The sharp hikes in interest rates in 2023 hammered households and businesses. The grind continued into 2024 with the Government cutting spending to reduce its huge deficit, new house construction slowing and unemployment rising.
Stats NZ GDP data shows that New Zealanders’ per capita real incomes declined for three years. ASB’s ranking of the economic performance of NZ’s 16 regions shows Nelson has been doing it particularly tough. We have been either 15th or 16th all through 2023 and bottom, at 16th, for the past four quarters.
I am, for the first time since becoming Mayor in October 2022, optimistic about our economy. I’m hearing it from business leaders. I’m seeing it in the economic statistics. I’m feeling a more positive vibe in the central city.
The GDP figures from Stats NZ last week showed growth of 0.7% for the last quarter of 2024 and the first increase in real per capita GDP since 2022. This month’s ASB Regional Economic Scoreboard showed the recovery was strongest in the South Island with Otago 1st, Canterbury 2nd and Tasman 3rd. Nelson rose from 16th to 9th place. This follows a pattern from the 1987 and 2008 recessions where the recovery started in the south.
Our city is benefitting from NMIT’s domestic student numbers increasing this year by 10% to 1654 and international students by 37% to 258. The 350-home Maitahi Village development in Kākā Valley, off the Maitai Valley, is a $356 million economic boost for the city. The two new travel lifts to be completed this year – a 550-tonne lift at Port Nelson and a 110-tonne lift at Nelson Marina – will grow our Blue Economy. Tourism, too, is back on the rise.
The recovery will be hard and long. We must push on with our city revitalisation plans. However, the good news is that our economy has turned the corner.
