City enjoying buoyant times

The city’s economy is growing and Palmerston North faces a positive future.


Key statistics released by Peter Crawford, the City Council’s Policy Analyst, Economic, show that the city is enjoying a buoyant economy with 9,000 extra jobs created in the years 2001-2006.


While the population has grown at a slower rate, Peter Crawford’s research shows that 1,500 people have moved off the benefit and into the workforce.


He says the outlook for a buoyant economy is influenced by the growth at both Linton and Ohakea and the increases in the Fonterra payouts to the farming community.


Retail sales growth in the city has accelerated since the middle of 2007, rising by 10.9 percent in August which is well above the national increase of 6.3 percent. Retail sales here have been higher than the national average since March.


While a sector breakdown of retail sales is not available locally, motor vehicle sales and accommodation were the main drivers nationally and will be reflected in Palmerston North trends.


For the first time retail sales reached the billion mark achieving $1.5 billion mark (ncluding motor vehicle sales and servicing) for the 12 months to July 2007. This was an eight percent increase over the previous year.


“Strong retail sales create more growth and more demand,” Peter says. “Palmerston North has now become an important retail sector in the lower half of the North Island. Our figures show that people from outside the city regular visit Palmerston North for a day of retail activity.”


Strong economic growth in the city means employment is increasing faster than the population growth through increased levels of participation in the labour force and people working in the city from surrounding districts.


For example Peter Crawford points out that 45 percent of Manawatu District’s workforce travel to another territorial authority to work, mostly to Palmerston North.


In the years between 2001 and 2006 employment in Palmerston North increased by 27 percent while the population rose by five percent, due in part to people moving off the benefit and a percentage of the labour force who work in the city but live elsewhere.


While business and property services, the construction industry and retail have increased in line with national trends the sectors that have shown remarkable growth are health and community services, 31 percent increase (19 percent nationally), government administration and defence, 40 percent (8 percent), personal and other services such as hairdressing and beauty salons, gardening services, laundries, video hire outlets, 56 percent (30 percent), transport and storage such as distribution centres, 97 percent (17 percent) and accommodation, cafes, restaurants, 43 percent (28 percent).


The population is now estimated at 78,800 – 0.4 percent increase from 2006 – however the city’s steady growth (6,000 in 15 years) is offset by a population decline in the Wanganui/Manawatu region of 2,340 during the same period.


Peter Crawford says affordability is one of the city’s attractions with the cost of residential property here being below the four main centres and provincial cities such as Napier and Nelson.


Looking ahead to the future Peter says the growth will be influenced by;


Major commercial developments such as a five star hotel, The Plaza and the expansion of Linton and Ohakea
Securing the ongoing international status of the city’s airport
Further residential development in Palmerston North
Enhancing the city’s visitor and tourism strategy
Attracting students to Massey, IPC and UCOL.