Central Otago is outperforming the national average across many industries, but faced different challenges to the rest of the country, Infometrics principal economist Brad Olsen said.

Speaking to a small group at the Packing Shed in Clyde on Tuesday, he said the district was challenged by growing pains rather than a lack of growth.

Organised by the Central Otago District Council, the Wellington-based economist packed a lot of detail into his 26-minute presentation, but the conflict in the Middle East was never far from his mind.

“There is some economic momentum and even more so in Central Otago, but everything is incredibly uncertain.”

With New Zealand facing the largest daily oil prices in 30 years (changing by the hour), Brad acknowledged petrol prices hitting the $3 mark was causing many challenges for householders.

But he said it was within industries where it will hurt the most, such as aviation fuel and diesel, with 6% of horticulture’s operating costs coming from fuel.

Otago, Southland and Canterbury’s primary sector has faced strong growth over the past year, particularly in the areas of dairy, meat and horticulture, with 6% of economic activity in Central Otago coming from those industries (compared with just 3-4% nationally).

A small group gathers at The Packing Shed near Clyde to listen to the Infometrics presentation on Tuesday evening. Image: The Central App

Construction was another growth industry across Central Otago - fuelled by the ongoing work in Queenstown Lakes, that was bucking the national trend.

Brad said the challenge in construction for Central Otago was how to embrace and lead that development, “because you don’t want to get stuck as the dormitory suburb.”

Otago and Taranaki are currently the only regions in New Zealand reporting growth in consumer spending over the past 12 months, backed by strong employment numbers and job opportunities.

Otago has greater levels of international tourism compared to the North Island, with guest nights up 2.4% and international arrivals into Queenstown airport surging to between 100%-140% of pre-pandemic levels.

But the figures for travel domestically were down 12% and Brad said electricity and gas prices, rising 12-16% last year - the largest increase since the 1980s, on top of a 3.8% increase in supermarket essentials was continuing to hurt New Zealanders.

“We are really starting to see the pressure coming through. Power bills are hitting us so we’re not spending as much on everyday items.”

CODC chief executive Peter Kelly asked Brad his opinion on the proposed Santana gold mine, to which he replied, “there is huge potential in the mine activity, in the right way.”

He added that mining operations are “high value” for regions such as the West Coast, but would like to see the Government raise the revenue tax from it, to benefit local areas more.

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