PALMERSTON NORTH CITY COUNCIL
Economic
Development Committee MEETING
9 September 2019
Order of Business
NOTE: The
Economic Development Committee meeting coincides with the extraordinary meeting
of the Arts, Culture and Heritage Committee. The
Committees will conduct business in the following order:
- Economic Development Committee
- Arts, Culture and Heritage Committee
1. Apologies
2. Notification
of Additional Items
Pursuant to Sections 46A(7) and
46A(7A) of the Local Government Official Information and Meetings Act 1987, to
receive the Chairperson’s explanation that specified item(s), which do
not appear on the Agenda of this meeting and/or the meeting to be held with the
public excluded, will be discussed.
Any additions in accordance with
Section 46A(7) must be approved by resolution with an explanation as to why
they cannot be delayed until a future meeting.
Any additions in accordance with
Section 46A(7A) may be received or referred to a subsequent meeting for further
discussion. No resolution, decision or recommendation can be made in respect
of a minor item.
3. Declarations
of Interest (if any)
Members are reminded of their duty
to give a general notice of any interest of items to be considered on this
agenda and the need to declare these interests.
4. Public
Comment
To receive comments from members of
the public on matters specified on this Agenda or, if time permits, on other
Committee matters.
(NOTE: If the
Committee wishes to consider or discuss any issue raised that is not specified
on the Agenda, other than to receive the comment made or refer it to the Chief
Executive, then a resolution will need to be made in accordance with clause 2
above.)
5. Presentation
- The Factory Page 7
6. Presentation
- Central Palmerston North Business Improvement District Inc Page 9
7. Confirmation
of Minutes Page 11
“That the minutes of the
Economic Development Committee meeting of 12 August 2019 Part I Public be
confirmed as a true and correct record.”
8. Summary
report on the June 2019 Manawatū Quarterly Economic Monitor, Major
Developments, the Quarterly Retail Report for July 2019, and major economic
events held during the year to June 2019 and update to the economic impact
models Page 15
Memorandum, presented by Linda
Stewart, CEO, CEDA and Peter Crawford, Economic Policy Advisor.
9. Committee
Work Schedule Page 55
10. Exclusion of Public
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To be moved:
“That the
public be excluded from the following parts of the proceedings of this
meeting listed in the table below.
The general
subject of each matter to be considered while the public is excluded, the
reason for passing this resolution in relation to each matter, and the
specific grounds under Section 48(1) of the Local Government Official
Information and Meetings Act 1987 for the passing of this resolution are as
follows:
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General
subject of each matter to be considered
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Reason for
passing this resolution in relation to each matter
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Ground(s)
under Section 48(1) for passing this resolution
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This resolution is made in reliance on Section
48(1)(a) of the Local Government Official Information and Meetings Act 1987
and the particular interest or interests protected by Section 6 or Section 7
of that Act which would be prejudiced by the holding of the whole or the
relevant part of the proceedings of the meeting in public as stated in the
above table.
Also that the
persons listed below be permitted to remain after the public has been
excluded for the reasons stated.
Chief Executive
(Heather Shotter), Chief Financial Officer (Grant Elliott), Chief
Infrastructure Officer (Tom Williams), General Manager – Strategy and
Planning (Sheryl Bryant), General Manager - Community (Debbie Duncan), Chief
Customer and Operating Officer (Chris Dyhrberg), General Manager - Marketing and
Communications (Sacha Haskell), Sandra King (Executive Officer) because of
their knowledge and ability to provide the meeting with advice on matters
both from an organisation-wide context (being members of the Council’s
Executive Leadership Team) and also from their specific role within the
Council.
Legal Counsel
(John Annabell), because of his knowledge and ability to provide the meeting
with legal and procedural advice.
Democracy
Administrators (Carly Chang, Courtney Kibby, Natalya Kushnirenko, and Penny
Odell), because of their knowledge and ability to provide the meeting with
procedural advice and record the proceedings of the meeting.
[Add Council
Officers], because of
their knowledge and ability to assist the meeting in speaking to their report
and answering questions, noting that such officer will be present at the
meeting only for the item that relate to their respective report.
[Add Third
Parties], because of their knowledge and ability to assist the
meeting in speaking to their report/s [or other matters as specified] and
answering questions, noting that such person/s will be present at the meeting
only for the items that relate to their respective report/s [or matters as
specified].
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PALMERSTON NORTH CITY COUNCIL
Memorandum
TO: Economic
Development Committee
MEETING DATE: 9
September 2019
TITLE: Summary
report on the June 2019 Manawatū Quarterly Economic Monitor, Major
Developments, the Quarterly Retail Report for July 2019, and major economic
events held during the year to June 2019 and update to the economic impact
models
Presented By: Linda
Stewart, CEO, CEDA and Peter Crawford, Economic Policy Advisor
APPROVED BY: David
Murphy, Acting General Manager - Strategy & Planning
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RECOMMENDATION(S) TO Economic Development Committee
1. That the
June 2019 Manawatū Quarterly Economic Monitor, Major Developments,
Quarterly Retail Report for July 2019, and Major Economic events during the
year to June 2019 and update to the economic impact models, are received.
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1.1 This
memorandum presents a summary of:
a. the
key themes in the latest Manawatū Quarterly Economic Monitor for the June
2019 quarter;
b. the
outlook for major construction projects in the region;
c. the
latest CEDA retail report for the three months ended July 2019; and
d. A
brief overview of major economic events held in the region in the year to June
2019 and the recent update to the economic impact models.
1.2 The
latest Manawatū Quarterly Economic Monitor report indicates weaker GDP
growth in the region in the year ended June 2019 due to a decline in
non-residential building consents. The estimates are provisional and will
be revised once labour force data is published. The latest jobs and
earnings data for June 2018 was published after the completion of the
Infometrics report and shows strong growth in jobs and salaries and wages in
the region, particularly in Palmerston North.
1.3 There
may be a moderating in the rate of growth in economic activity over the next 12
months due to delays in the commencement of construction projects expected in the
region. There are also some short-term impacts on the dairy sector from
increased Reserve Bank pressure on the banks to constrain debt levels for dairy
farmers. This is likely to reduce their spending in the short-term.
However, the rate of growth in the region is expected to remain above the rate
of growth for New Zealand.
1.4 There
was a 7.7% increase in the number of people in the region registered for the
job seeker benefit in the June quarter, which appears to contradict other signs
of strong economic growth in the region. Factors which appear to have
contributed to this have been a decline in rental housing stock in
Rangitīkei and Tararua districts and increased movement of people into the
region to find work.
2. manawatū
quarterly economic monitor – june 2019
2.1 Estimated
annual gross domestic product (GDP) growth in the Manawatū region was 2.6%
in the year ended June 2019, compared with an increase of 3.1% in the year to
March (the previous estimate was an increase of 2.9%). New Zealand GDP is
estimated to have increased by 2.5% in the year to June 2019, the same as the
growth rate in the year to March.
a. Palmerston
North GDP increased by 2.3%,
b. Manawatū District GDP increased by 3.5%.
2.2 Annual salaries and wages paid
in the region in the year ended June 2018 were $3,029 million, increasing by
6.3% from the previous year, while earnings for New Zealand increased by 6.5%.
a. Palmerston North annual
salaries and wages were $2,596 million in the year ended June 2018, increasing
by 6.0% from 2017,
b. Manawatū
district salaries and wages were $433 million, increasing by 8.5%.
2.3 Total filled jobs in the
region were 56,170 in the June 2018 quarter, increasing by 3.2% from the
previous year, while filled jobs for New Zealand increased by 2.6%.
a. Palmerston North
filled jobs were 47,610 in the June 2018 quarter, increasing by 3.3% from 2017
(an annual increase of 1,510 jobs),
b. Manawatū
district filled jobs were 8,560, increasing by 2.6%.
2.4 Annual median salaries and
wages paid in the region in the year ended June 2018 were $49,970, increasing
by 3.3% from the previous year, while median salaries and wages for New Zealand
were $52,110, increasing by 3.2% from the previous year.
a. Palmerston North
median salaries and wages were $50,340, increasing by 3.4% from 2017,
b. Manawatū district median
salaries and wages were $47,910, increasing by 2.9%.
2.5 The average quarterly worker
turnover rate in the region in the year ended June 2018 was 15.1%, increasing
from 13.3% in the year to June 2017 year, while the average worker turnover
rate for New Zealand was 16.6%, increasing from 15.8% in the previous year.
a. The average worker
turnover rate in Palmerston North was 15.1%, increasing from 13.1% in 2017,
b. The average worker
turnover rate in Manawatū district was 14.9%, increasing from 14.4% in the
previous year.
2.6 Electronic
card retail spending in the Manawatū region in the June quarter was
$344 million, an increase of 4.9% from the June 2018 quarter, while
national growth was 3.0%.
a. Annual electronic card retail spending in the region for
the year ended June 2019 was $1,390 million, an increase of 5.1% from 2018.
This compares with an increase of 3.4% for New Zealand.
2.7 Commercial
accommodation guest nights in the Manawatū region increased by 9.1% in the
June 2019 quarter from the June 2018 quarter, while national guest nights
increased by 2.8%.
a. Annual
commercial guest nights in the Manawatū region were 502,680 in the year
ended June 2019, an increase of 8.2% from the previous year. This compares with
an increase of 1.3% for New Zealand.
2.8 The
total value of building consents issued in the region in the June 2019 quarter
was $84 million, compared with $89 million in the June 2018 quarter, a decline
of 5%. National consent values increased by 11%.
a. Building consents to the value of $357 million were issued
in the region in the year to June 2019, a decline of 2% from the previous
year. The total in the year to June 2018 was the highest recorded since
the building consents series began in 1990. National consent values increased
by 6% over the same period. The value of building consents issued in
Palmerston North was $243 million, a decline of 12% from the previous
year, while the value in Manawatū district was $115 million, increasing by
25%.
b. Consents for 140 new residential dwellings were issued in
the region in the June 2019 quarter, compared with 159 in the June 2018
quarter, a decline of 12%. National consents increased by 3%.
c. Consents for 622 new residential dwellings were issued in
the region in the year ended June 2019, compared with 612 in the previous year,
an increase of 3%. National consents increased by 6%.
d. Non-residential consents to the value of $117 million were
issued in the region during the year to June 2019, a decline of 22% from the
previous year. National consents increased by 8% over the same period.
2.9 Car
registrations in the region declined by 2.4% in the year ended June 2019
(national registrations declined by 8.6%) while the number of commercial
vehicles registered increased by 19.8% (compared to a national increase of
0.3%).
2.10 It is estimated
the annual average unemployment rate in the Manawatū region in the year
ended June 2019 was 4.9%, which was above the unemployment rate of 4.1% for New
Zealand.
2.11 The number of
people in the region registered for the MSD Job Seekers benefit increased by
6.7% in June 2019 from June 2018, while the number in New Zealand increased by
11.2%. The MSD benefit numbers reported in the Infometrics report are based on
the average of the last four quarters.
2.12 Traffic flows
in the Manawatū region in the year to June 2019 increased by 1.7% from
2018, while there was an increase of 1.5% for New Zealand.
2.13 Tourism
spending in the Manawatū region in the June quarter was $118 million, an
increase of 2.4% from the June 2018 quarter. Total tourism spending in
New Zealand increased by 5.5%.
a. Total visitor
spending in the region was $486 million in the year
ended June 2019 ($433 million in Palmerston North and $53 million in
Manawatū district), increasing by 3.2% from the previous year (New Zealand
also increased by 3.2%).
b. Domestic visitor spending in the region was $409 million in
the year ended June 2019, increasing by 2.3% from the previous year (2.3%
increase for New Zealand). There was strong growth in spending in the June
quarter from visitors from the rest of the Manawatū-Whanganui region,
which increased by 9.3% from the previous year.
c. International visitor spending in the region was $77
million in the year ended June 2019, increasing by 8.5% from the previous year
(4.6% increase for New Zealand). Countries contributing the most to the
increase in spending in the region were Australia, the rest of Oceania
(excluding Australia), the USA and China.
2.14 Population
estimates, based on primary health organisation registrations, suggest the
region’s population increased by 3,323 people between June 2018 and June
2019, an increase of 3.2% (1.8% increase for New Zealand)
2.15 The
Manawatū Economic Monitor for the June 2019 quarter is attached.
3. major
developments
3.1 Major
development and construction projects announced for Palmerston North and the
Manawatū region amount to at least $3.0 - $3.5 billion of construction
activity to 2030. Some projects are still waiting for final approval -
the largest of these is the MidCentral DHB investment plan. Projects
which are close to completion have been deleted from the list.
3.2 A
list of projects is attached.
4. manawatū
region quarterly electronic card retail report for july 2019
4.1 The
latest CEDA quarterly retail report for the three months ended July 2019 shows
continued growth in electronic card retail spending in the Manawatū
region, which increased by 3.5% in the three months ended July 2019. New
Zealand retail spending increased by 2.4% over the same period.
4.2 Spending
by local residents at Manawatū region retailers increased by 6.0% in the
three months ended July 2019 and was the largest contributor to the growth in
total spending in the region. Spending by local residents in other
regions has been slowing, with a 0.2% decline in the three months ended July.
4.3 There
was a 2.4% decline in domestic visitor spending in the region in the latest
period, despite growth in spending from the rest of the Horizons region.
Visitor spending from the rest of the Horizons region increased by 5.2% in the
three months ended July 2019, while visitor spending from the rest of New
Zealand declined by 10.1%. Contributing to this weakness in growth from
other regions was a 19.8% decline in spending from Auckland residents, 7.4%
decline from the Waikato, 8.1% decline in spending from the Hawkes Bay, and a
3.9% decline in spending from the Wellington region.
4.4 Retail
precinct data shows a 2.2% decline in spending in Broadway, which is likely to
be due to the closure of Whitcoulls in May 2018. There was an increase of 4.1%
in the rest of Palmerston North CBD, but the strongest growth in the city was
in the outer CBD, where spending increased by 6.0% in the three months to
July. The rate of growth in spending remains slightly higher in
Manawatū District, with an increase of 3.9% across the district compared
with 3.5% in the city.
4.5 Manawatū
region residents spent $32.9.4 million online in the three months ended July 2019,
accounting for 9.3% of total electronic card spending by residents in the
region. This remains below the 11.3% online share for all New Zealand
residents. Manawatū region resident online spending increased by
36.5% in the three months ended July while national growth was 1.9%. It
appears most of the increase in Manawatū region online spending went to
New Zealand-based online retailers. Between July 2016 and July 2019, the
share of Manawatū region online spending going to domestic retailers
increased from 49.4% of total online spending to 65.4%.
4.6 A
copy of the Manawatū Region Electronic Card Quarterly Report is attached.
5. Major
economic events held in year to june 2019 and update to the economic models
5.1 The
daily expenditure values used in the Ernst and Young economic impact models,
which were originally purchased by Destination Manawatū in 2002, have been
reviewed on a five-yearly basis to update them for inflation. The daily
expenditure values were last reviewed in 2014, so were due for review this
year. The majority of the models have been updated using the 5.4%
increase in the Consumer Price Index between June 2014 and March 2019.
However, the conference and business traveller models were increased by 10%,
based on retail price index deflators, which showed a 10.7% increase in prices
in the commercial accommodation sector. The increase in the retail price
deflator between June 2014 and March 2019 for the total retail sector
(including accommodation) was just 1.0%. The updated daily expenditure
values for domestic visitors are:
5.2 Key
organisations involved in managing Council event funding were asked to provide
a list of major events held during the year to June 2019, the estimated
economic benefit they created, and the amount of Council funding provided for
events. Estimates were not made for the Festival of Cultures and Hilux
Rural Games because the open nature of the Square makes it very challenging to
measure total attendance during these events. The economic models only
estimate the direct economic benefit of visitor spending from events and not
the wider promotional benefits, which are much harder to assess.
5.3 The
event information received from the City Council events team, CEDA, RACE, Sport
Manawatū and Central Energy Trust Arena shows a total net economic impact
of $19 million and total Council direct funding of $469,270. The economic
impact measure is based on net value added, an estimate of how much personal
and business income is created that stays in the region. At the time of
completing this report a response had not been received from Manfeild.
The funding data does not include the cost of providing facilities such as
sport fields and Central Energy Trust Arena, but the economic impact estimate
confirms there is an economic benefit to ratepayers from their funding for
these facilities.
5.4 A
table with the list of events last year and their estimated economic impact is
attached.
6. Compliance
and administration
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Does the Committee have
delegated authority to decide?
If Yes quote relevant clause(s)
from Delegations Manual 166
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Yes
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Are the decisions significant?
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No
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If they are significant do they
affect land or a body of water?
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No
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Can this decision only be made
through a 10 Year Plan?
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No
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Does this decision require consultation
through the Special Consultative procedure?
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No
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Is there funding in the current
Annual Plan for these actions?
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Yes
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Are the recommendations
inconsistent with any of Council’s policies or plans?
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No
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The recommendations contribute
to Goal 1: An Innovative and Growing City
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The recommendations contribute
to the outcomes of the City Development Strategy
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The recommendations contribute
to the achievement of action/actions in the Economic Development Plan
The action is: Attract
investment expansion and new businesses
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Contribution to strategic
direction
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Reporting on economic trends in
the city and Manawatū region, and the longer-term outlook for growth, is
important for encouraging local businesses to invest in growing their
business and attracting new businesses to the city.
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Attachments
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1.
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Manawatū Quarterly Economic Monitor - June 2019 quarter
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2.
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Major Developments ⇩ 
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3.
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Quarterly Retail Report for July 2019 ⇩ 
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4.
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Major economic events held during the year to June 2019 ⇩ 
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