A FEW STATISTICS

2007 Waitaki District economic performance Report
How well did we do? We did very well, thank you.

Summary
In 2007 Waitaki had 8,700 full-time equivalent employees (FTEs) in 2,800 businesses and made $753 million in GDP. In 2006 we had 8,300 FTEs in 2,600 businesses and made $684 million in GDP. We performed better than NZ as a whole in 5 of the 8 reported economic growth categories:

In 2007 Tourism in the Waitaki economy accounted for around 540 FTEs, and produced $31.3 million in GDP through 159 businesses. In 2006 we had 518 FTEs and produced $31.2 million in GDP through 157 businesses. We performed better than NZ as a whole in all the reported tourism growth categories:

Looking only at GDP does not tell the full story in Waitaki. Our relatively flat population growth and related employment shortage make it difficult to achieve big rises in GDP. GDP per capita and Labour Productivity per capita give a better picture of our economic prosperity. Over the past ten years 1997-2007, Waitaki GDP per capita has increased 2.0% per annum, above the NZ average of 0.5% pa. Similarly, our Labour Productivity per capita has risen at 1.0% pa, above the NZ average of 0.8% pa.

Now, let's look at the detail.

Waitaki 2007 Employment
2007 saw a significant improvement for Waitaki. The stars of economic development were GDP and Employment growth.

GDP growth in Waitaki reached 2.0%, compared with 1.6% nationally. Population growth was flat; however that was an improvement on our decline in 2006. In NZ, population grew 1.0%, but had lower GDP growth, which resulted in only a 0.5% GDP per capita rise overall. Employment growth surged 4.3% in Waitaki, compared with only 2.0% for NZ.

Waitaki businesses grew an impressive 3.4%, while NZ businesses experienced little growth. The number of business units in Waitaki grew 0.9%, around half the rate in NZ overall….however, this means that rather than large numbers of new businesses being formed, existing businesses in Waitaki were expanding. That’s good.

Labour Productivity fell 2.1% in the year. But then, for a second consecutive year Labour Productivity declined in NZ overall, so we were not alone.

Waitaki Long Term Employment
Long-term data presents a broader view of the ongoing development of Waitaki’s economy. Our GDP per capita has grown strongly, at 2.0% per annum. This compares with stronger GDP and population growth in NZ overall, but with lower GDP per capita growth. Employment growth has been far more positive in the last few years, after three years of sharp falls in the late 1990’s. The result is an overall long-term growth in employment figure of 0.6% pa compared with NZ’s 2.4% pa.

Similarly, the number of businesses in Waitaki has grown strongly in recent years after earlier decreases. Business size is another area where the good results in 2007 followed several years of falling business size. This has resulted in business size contraction favourably comparable with that of NZ.

Workers have been becoming more productive at a faster rate in Waitaki than in NZ overall, with an average improvement of 1.0% pa compared with 0.8% pa for NZ.

Waitaki 2007 Sector Employment

In 2007, the three sectors accounting for the bulk of Employment and GDP were Manufacturing and Building, Retail and Distribution, and Primary.

The Manufacturing and Building sector remained the largest employer in Waitaki, with 30% of all FTEs. This was followed by Retail and Distribution, and Primary, each with around 22%. Social Services, Business Services, and Recreation Services provided one quarter of FTEs between them. Manufacturing and Building produced an even greater portion of GDP, at 34%. This was well ahead of Primary with 21%, and Retail and Distribution with 15%. The relatively high labour productivity in Business Services ensured that it held third place in terms of GDP contribution, at 19%.

The large number of single operator businesses in the Primary sector explains why it accounts for 38% of all businesses in Waitaki. Meanwhile, Manufacturing and Building, which is characterised by larger numbers of employees per business, accounts for just 11%. The Business Services sector, also usually with fewer FTEs per business, has 23% of all businesses.

Waitaki Long Term Sector Employment
Increases in employment, beyond being good for the general economic well-being of the district, suggests confidence in our medium-term future.

Employment in Waitaki surged by 4.3% in 2007, after a slight decline in 2006. Leading the growth was an increase of almost 150 FTEs in Social Services. A large part of this rise was in the Education industry, where numbers dipped in 2006 and then recovered in 2007. Further growth, around 40 FTEs, occurred in Community Services.

More than 100 FTEs were added in Retail and Distribution, mostly in accommodation, cafés and restaurants. This is a 5.7% increase over 2006. There were also improvements in the number of people employed in the Primary and Manufacturing and Building sectors, while changes in Business Services and Recreation Services were negligible.

Over the ten year period since 1997, all sectors other than Primary have seen employment rise. The Primary sector saw employment fall over the decade, by an average of 0.2% pa, despite strong growth in the last two years. This equates to a total reduction in FTEs in the sector of around 40 since 1997.

Waitaki GDP
Measuring Gross Domestic Product (GDP) growth allows us to assess whether sectors in the local economy are enjoying broad increases in activity or not. Any increase suggests that the sector is enjoying greater demand for its products or services, and is thus expanding to meet that need.

Waitaki's GDP grew by 2.0% in 2007, a far better performance than in 2006, when GDP fell by around 5.7%. Waitaki produced $102 million more in GDP in 2007 than in 1997. This has been against a backdrop of a falling resident population in the district, with its challenges to employment growth, and therefore GDP growth.

In 2007, Social Services GDP rose by 8.9%, compared to the 1.2% fall in 2006. The turnaround in Manufacturing and Building reached 2.9% growth in 2007 after a 6.9% decline in 2006. A big portion of the improvement in this sector was in food and beverage manufacturing. Retail and Distribution, and Recreation Services also achieved an increase in GDP in 2007. All six sectors recorded gains in GDP contribution over the decade to 2007.

Waitaki GDP per capita
Looking at GDP per capita growth allows a comparison of economic performance that takes into consideration the constraint of slower population (and therefore employment) growth on total GDP.

GDP per capita in Waitaki stood at $37,235 in 2007, up from $36,501 the year before. This compared with NZ figures of $40,424 and $40,633 for 2006 and 2007 respectively.

Total GDP per capita in Waitaki grew by 2.0% in 2007 after a poor performance in 2006. Substantial declines in GDP per capita in the Manufacturing and Building, Primary, Business Services, and Social Services sectors in 2006 were followed by huge improvements in 2007.

The long-term picture of GDP per capita provides a more useful trend. Over the ten years 1997-2007, all sectors recorded rises in their contributions to GDP per capita. Four of the six sectors experienced improvements above the NZ average - Recreation Services, Retail and Distribution, Manufacturing and Building and Primary. The result was an average GDP per capita growth rate of 2.0% pa for Waitaki over the ten-year period.

Waitaki Business units
An increase in business units means there is confidence in our future. It also means that consumers have greater access to a wider choice of products and services. In 2007, the total number of businesses in Waitaki increased to 2,827, a gain of 24 businesses over 2006. The number of businesses is up almost 300 in ten years.

Every sector apart from Primary saw an increase in businesses in 2007. The Manufacturing and Building sector led the way, with an extra 25 businesses, or 8.4% growth. A large proportion of this growth was in construction trade services, which added around 20 new businesses.

The Business Service sector also grew significantly, adding 20 new businesses, a 3.3% rise. Most of the gains in business services were in property services and finance. The Retail and Distribution, Recreation Services, and Social Services sectors all had smaller gains, while the Primary sector had around 30 businesses fewer in 2007 than in 2006.

Waitaki Labour Productivity
Examining improvements in Labour Productivity (the output or “product” produced by each FTE in the sector) shows us which sectors are making best use of technology or other advances to make their workers more efficient in production. Looking at business size is useful in that an expansion in business size within a sector suggests business confidence in the medium-term future of that sector.

Labour Productivity continued to decrease in 2007, mostly as a result of ongoing declines in the Primary sector. Overall, Labour Productivity in Waitaki stood at $80,945 in 2007, around 3.0% below the NZ average.

Labour Productivity in the Social Services sector declined by 4.3%, or almost $2,600 per FTE in 2007. This is not surprising, as strong employment growth is typically characterised by periods of adjustment in Labour Productivity. The rapid fall in Labour Productivity seen in the Primary sector in 2006 slowed to -2.4% in 2007. While the reason for this overall decline is unclear, it may well be linked to the shift away from sheep farming to dairying. Any large shift between industries is likely to negatively affect Labour Productivity in the short to medium-term.

Business size
The average business size is measured as FTEs per business. Businesses in Waitaki tend to be smaller on average than in NZ as a whole. In 2007, the average business in Waitaki employed 3.1 FTEs, compared with 3.7 in all of NZ.

Business size grew in Waitaki in 2007 by an average of 3.4%, a far more rapid rate than the national growth of 0.1%. This gain all but recouped the loss in business size seen in 2006, when the number of FTEs per business fell 3.8% in Waitaki.

Waitaki 2007 Tourism
In 2007 Tourism in the Waitaki economy accounted for around 540 FTEs, and produced $31.3 million in GDP through 159 businesses. The importance of Tourism to the local Waitaki economy is similar to that of NZ overall, with slightly fewer FTEs and less GDP, but more businesses in our region.

In 2007 Tourism in Waitaki performed better than NZ as a whole. Direct Tourism employment grew by 6.4%, well ahead of NZ’s 1.9%. Tourism contribution to GDP in Waitaki also rose a modest 0.5%, while direct tourism GDP in NZ as a whole fell by 1.2%. The number of businesses directly attributed to Tourism in Waitaki also rose by 1.3%. Nationally, growth was significantly lower at 0.8%.

Waitaki Long Term Tourism
Over the decade 1997-2007, Tourism has outperformed overall economic growth in Waitaki. Tourism GDP growth has been similar to total GDP growth in Waitaki, at 1.5% pa. However, employment and business units have both seen stronger rises than overall in the district.

Waitaki Dairy Cows and Sheep

In 2007 the number of dairy herds in Waitaki rose 6.8%, while the number of dairy herds in NZ as a whole fell 2.1%. The number of dairy cows in Waitaki surged 11.8%, compared with just 2.2% in NZ. This was the highest rate of change in Waitaki since 2002-03, and saw total cows reach 57,043. Growth in area under dairy production almost matched the rise in cow numbers in Waitaki, 11.7%. Nationally, area under dairy production grew just 1.0%. Over the past five years, dairy cow numbers averaged 7.1% growth in Waitaki, compared with just 1.2% growth in NZ. The number of our dairy cows has increased 41.1%, or 16,600 cows, in just five years.

The picture in sheep farming is the inverse of that seen in dairy. Sheep numbers fell by 12% between 2002-03 and 2003-04, and by a further 7.4% in 2004-05, before flattening out at around 900,000. Sheep numbers in Waitaki have declined faster than nationally across all years 1997-2007, except the last two years.

Waitaki Housing
While Waitaki house prices are far lower than the NZ average, as would be expected, the district has seen higher than average price rises over the last three years. It has also seen unprecedented numbers of sales.

House sales in Waitaki fell by 12% in 2006, following the national trend. However, this was reversed in 2007, with sales reaching almost 700, a rise of 29% over 2006. This % increase was nearly four times that of NZ. Over the three years since 2004, sales have averaged 2.7% pa growth in Waitaki, compared with just 0.2% pa in NZ.

House prices grew strongly throughout NZ over the three years to 2005-07, achieving 13.7% pa during that time. However, house prices in Waitaki increased even faster, with an average of 14.2% pa. Price growth was subdued in 2005-06, managing only 6.2% growth after 21.2% growth in 2004-05. Prices took off again in 2007, nearly reaching the $200,000 mark.