Infometrics principal economist Nick Brunsdon said weak consumer spending followed the Reserve Bank driving up interest rates to bring inflation under control after the Covid-19 pandemic.
Dunedin’s experience largely reflected the national situation, he said.
Discretionary spending had fallen away as households focused on groceries and fuel amid rising cost-of-living expenses.
Mr Brunsdon led a presentation at the Dunedin City Council’s economic development committee meeting yesterday.
A provisional contraction in gross domestic product (GDP) was ‘‘not pretty’’, he said.
GDP was provisionally down 0.6% in Dunedin in the year to June and it declined 0.2% nationally.
However, Mr Brunsdon said the makeup of the city’s economy was diverse and strong.
Professional, scientific and technical services made the largest contribution to overall growth in the city between 2022 and last year.
The largest detractor from growth was retail trade, while education and training remained a large sector, but shrank.
Mr Brunsdon said construction had been at an elevated level.
Economic development committee chairman Cr Andrew Whiley said some ‘‘Covid lag’’ was still evident, but the city was doing reasonably well.
‘‘The city does have a lot of positives,’’ he said.
Cr Lee Vandervis said the Infometrics profile until last year showed Dunedin was below average on a series of metrics, including business growth, population growth, employment growth and productivity level.
‘‘To say that the city has a lot of positives, that we are on top of a strong economy and that we have a strong rate of employment — to me, is to roll these very hard data facts in glitter.’’
The city needed to look at cities such as Napier to see what they were doing differently in fields such as arts, concerts and shifting freight, he said.
Cr Christine Garey said positives included more affordable housing and growth in construction.
‘‘All things considered, we’re doing pretty damn well.’’
Dunedin Mayor Jules Radich said the council needed to put more funding into economic development to initiate tactical responses to the data.
One might be leveraging off education to retain ‘‘bright young minds’’ in the city with new businesses, he suggested.
Cr Steve Walker said Dunedin’s strengths included vibrancy brought by youth, creativity, a stunning environment and ‘‘travel and commute times that are the envy of cities across the planet’’.
