Speaking at a Queenstown Business Chamber of Commerce Westpac Smarts event, Arrowtown-based regional economist Benje Patterson talked through his Queenstown-Lakes economic update for February.
In the December quarter, gross domestic product was up 8% per annum - the fastest growth of any territorial authority in New Zealand.
Nationally, consumer and business confidence has dropped to levels last seen during the global financial crisis, and, in the December quarter, there was a 4% decline in the volume of retail spending across the country.
But in Queenstown, a net 28% of businesses surveyed by the Chamber in December expected an activity increase in the March, 2023, quarter.
Mr Patterson said in the year to December, consumer spending was up 23.7% in Queenstown-Lakes, tourism expenditure was up 36.2%, residential consents increased by 9.2% and commercial consents by 29.1%.
On average, there was about 9% wage growth in the local economy, compared with about 10% in 2021, and the national average of 6.4%.
"It looks very, very different when you go industry by industry," he said.
"Health-care workers, teachers ... council workers, they’re not getting much of an increase.
"Then you have the ones most severely affected by labour shortages — activity, accommodation, hospitality. A lot of those are ... in the 15%-20% range."
Additionally, the district was now back to record employment, he said.
While he accepted that did not pass "the sniff test", through Covid, despite the hollowing out of the business sector, the district saw "pretty significant" growth in the population.
Over the past year, there had been about a 5% increase in enrolments with local GPs, which was a "really good proxy for population growth".
That led to rapid increases in employment in professional services, health, education, manufacturing, construction and retail, for example.
However, in the accommodation and hospitality sector, there were still 1200 fewer people employed than pre-Covid.
When the tourism rebound was accounted for - passenger numbers increased by 1% in January compared with pre-Covid, according to Queenstown Airport data - it was creating huge pressure for businesses.
There was no regional data available relating to inflation, however, Mr Patterson said some businesses he had spoken to were reporting increases of up to 40% in their costs.
That, combined with wage growth, particularly in struggling industries, meant some businesses had "reached the limits of what they can do with their cheque book".
Specifically the accommodation and hospitality sectors.
"That’s why there are pressures on our businesses. They’re very real, and we need to look below these headline figures in conversations we’re having [with] external people to our region."
On the up in resort
• GDP up 8%.
• Consumer spending up 23.7%.
• Wage growth up 9%.
• Queenstown Airport arrivals up 1% from pre-Covid.
