The Waikato region is in good shape but there’s room for improvement. That was the general conclusion of a summary from Waikato Regional Council as it recently presented the annual update to the Waikato Progress Indicator – Tupuranga Waikato report. Every year, the report takes the region’s pulse across a range of issues, measuring 32 social, environmental and economic indicators.
The Waikato Story team has taken a look in to some of the key economic indicators, to understand the picture they paint for the Mighty Waikato.
One area that is trending well for the Waikato is regional GDP (a figure calculated to show the total value of goods and services produced). Even though there have been a number of influences on the economy, and we are a region strongly affected by agricultural commodity prices, our regional GDP figure for 2017 improved on the previous year (2016: $48,201; 2017: $50,068 per person per year.)
Regional GDP per person slumped during the GFC and has since recovered but, according to Statistics New Zealand, growth in Waikato regional GDP over the period 2012 to 2017 was led by the manufacturing and construction industries, offsetting decreases in the agriculture industry over this period.
Our regional GDP is typically 10% lower than the national average, with is heightened by high averages in Auckland and Wellington. In 2017, the Waikato region contributed 8.4 percent of New Zealand’s GDP.
The value of building consents in the region rose by $80m since the last WPI report (2016: $1,425m; 3017: $1,505m), with this improving trend reflecting a rapid rise in building activity in the region.
This as important measure as the value of building consents issued is seen as a leading indicator of economic activity. An increase in building consents is linked with an area’s economic growth.
Latest results for the year to June 2017 show a sharp increase in building activity to new record levels, with New Zealand overall being in the midst of its largest building boom ever. According to Statistics New Zealand (SNZ) figures, the Waikato region saw around $1.51 billion of consents issued for new buildings during the year to June 2017.
There are more of us in work than during the last report and, although not a significant change, the employment rate is slightly higher than in 2016, which reflects the trend across the country. (Employment rate, per cent of working age population – 2016: 66%; 2017: 69%.)
This 69% employment rate is affected by several factors, including economic conditions and the availability of work, migration flows, skill levels, family responsibilities and personal decisions, but it continues to be a valuable measure of the economic climate in the region. We are now at rate similar to or slightly higher than the levels we saw before the 2008 financial crisis.
Having a paid job is a major factor determining people’s personal income, which in turn determines people’s ability to purchase goods and services, so it’s an important factor to measure. Employment rates also influence many other measures that impact how well a region is performing and, importantly, day-to-day quality of life in a region, with impacts on outcomes such as affects health, housing, education and crime. Employment is also linked to people’s ability to participate and have a sense of belonging in their community.
The Waikato Progress Indicators report shows that, following a period of slow growth, the real median household income in the Waikato region is generally flowing an improving trend, despite being slightly down on the 2016 figure.
Median weekly household income in the Waikato region is around $80 below the national average, at $1498 in 2017 compared to $1578 for New Zealand overall. At both the regional and national levels, after adjusting for inflation, this 2017 figure was more than 10% higher than in 2007.
This figure is calculated from median weekly household income from the New Zealand Income Survey, adjusted by the Consumer Price Index (CPI) (a measure of the average price of consumer goods and services purchased by households).
The final measure shines a positive light on the future labour force for the region, by looking at educational achievement, which is also steadily rising in the Waikato.
The educational attainment indicator shows the percentage of school leavers with NCEA level 2 or above, from Ministry of Education records. With a 3% rise on last year, 79% of the region’s school leavers for 2016 attain NCEA level 2 or above, compared to 76% in 2015.
Those who leave education with few qualifications are at much greater risk of unemployment and are more likely to have lower incomes, and fewer employment opportunities than those with higher qualifications. This would have future impact on a number of the other economic indicators above.
Although, the Waikato region still has a slightly below average level of educational attainment compared to New Zealand overall, it is positive for the region’s future to see an upward trend in educational achievement at this level.
The full Waikato Progress Indicator – Tupuranga Waikato reportand analysis is available on Waikato Regional Council’s website.