Napier City Economic and Tourism Update

1. Napier City Economic and Tourism Update 25 November 2010

2. Purpose – to indicate: • Economic and tourism trends in the City over the past four years or so • The current economic and tourism situation in Napier • The economic and tourism outlook for the coming year • Some of the economic challenges ahead for the City

3. Subject Coverage • Demographic (population and households) • Economic growth • Industry growth • Business confidence • Employment • Income • Tourism • City developments

4. Population Change Since 2006 Year • Total population gain of 800 or 1.4% since 2006,compared to 4.4% nationally. Present population 57,600 • Population growth driven by natural population gain and net internal migration gain (from other parts of NZ) • Further population growth projected

5. New Residential Construction • Overall fall since 2006 but 50% gain over the latest September year • Since June 2006, total additional housing in Napier of 1,106 or 4.8% • Projected growth to around 25,000 during nextfive years, from currently 24,188

6. Local Economic Indicators • Large falls over 2007-2009 for most indicators; gains for new building consents for other than residential and commercial/industrial building • Significant gains from a low base for most economic indicatorsover the past year

7. Total Economic Growth • Some positive growth over the latest June year, following the sharp decline over the 2008/09 year • Historically, growth has fluctuated in the City quite noticeably • National economic growth over the past year of 0.6%,compared to Napier 0.9% and Hawke’s Bay -1.3%

8. Employment • Approx 3% fall in employment since 2008 • More than doubling of unemployment numbers since 2008 • September unemployment rate of 6.2%, New Zealand 6.2% and Hawke’s Bay region 7% • Labourforce participation rate stable last 4 years

9. Latest Industry Profile • Largest employing industries are retailing, manufacturing/processing, education and training, healthcare and social assistance, and visitor accommodation/food services

10. Latest Industry Profile [cont’d] • Largest employment gains last decade have been, in order, public utility services, administrative and support services, arts and recreation services, construction and professional/scientific/technical services. • Employment decline for manufacturing (tobacco, textiles, chemicals, transport equipment), wholesaling, postal services and hospital services. • Last three years – most employment gains for utility services, finance and insurance services, administration and support services (especially labour supply services). Largest employment falls for construction activity and services, public administration/defence, rental/hiring services, food/beverage services and wholesaling. • Average business employment size is 4 staff – primary production (4), manufacturing (7), construction (3) and services (4)

11. Top 20 Industry Employers • Local Govt (390) • Road Freight Services (370) • Pre-School Education (360) • Road Construction (330) • Cleaning Services (310) • Management Advisory Services (310) • Medical GP Services (300) • Takeaway Food (290) • Pipfruit Growing (280) • Clothing Retailing (280) • Supermarkets (1,080) • Employment Support Services (990) • Cafes/Restaurants (800) • High School Education (600) • Visitor Accommodation (570) • Primary Education (550) • Aged Care Services (530) • Tertiary Education (460) • Social Assistance (450) • Central Govt Admin (410)

12. Business Confidence

13. Main Current Business Influences

14. Port International Trade Tonnages • Exports account for 83% of total tonnages • Export tonnages increase of approx 20% since 2008 • Import tonnages fell 38% last year but have recovered 83% duringthe latest year • Cruise ship visits this season – 50 visits with acombined visitor impact of some 103,200

15. Tourism Sector • Slight increase in commercial plus private household visitor numbers over latest year, following gradual fall during previous 4 years • i-Site visitor numbers have fallen fairly steadily since 2007 • Total visitor nights have fallen overall, over the period • Average length of stay has fallen since 2008

16. Positive City Ec. Developments • Further Council roading/ cycleway infrastructural work • Completion of Taradale business area upgrading • Start to the new Museum development • Further housing development at Parklands and Te Awa Estate • EIT Hawke’s Bay – proposed merger with Tairawhiti Polytechnic in Gisborne will allow EIT to grow further; increased Youth Guarantee Scheme student places next year; increased research activity • Inner City business changes including the Farmers retail proposal • Ongoing Ahuriri residential/retail/office developments • Power supply initiatives (Unison dividend payment, smart meters) • Hawke’s Bay Airport projects (runway extension and Skyline Aviation)

17. Latest Benefit Numbers • Numbers in brackets are %s of the total • Significant increase in unemployment benefit numbers and share of total benefits • Fall in Domestic Purposes and Invalids Benefit % shares

18. Outlook for Coming Year • A positive-coming up to the ‘busy season’ here in HB • Napier businesses still positive overall about improved economic and business conditions during the next year • Improvement is likely to be fairly ‘low and slow’ • Labour-market good for some (eg qualified and experienced staff) but difficult for others (entry level) • Things still difficult for a number of households

19. Economic Challenges • Continued recovery from the economic downturn • Population growth • Tourism sector growth • Business sector support • More employment opportunity • Production/manufacturing/exporting • Further education and training • Infrastructural developments

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