Auckland city business and economy report 2008

Executive summary | Past economic performance | Relative international economic performance | Economic structure | Population | Labour market | Retail trade and tourism | Building and property | Inflation, interest rates and the exchange rate | Focus on manufacturing | Focus on Rosebank 2030 | Economic outlook | Auckland city in figures | Download the report

Retail trade and tourism

Annual retail growth in Auckland city has slowed due to tighter household budgets and low consumer confidence. Total sales increased by 3.6 per cent in the year to March 2008, which is below the five-year average of 5.8 per cent. However, this masks weakening in retail sales in the March 2008 quarter.

Rising food and fuel costs and increased housing costs from higher mortgage interest rates have reduced household spend in other areas.

High interest rates have a particularly heavy impact on Auckland city households where mortgage repayment as a proportion of household income is higher than the national average. This has put pressure on many retailers, evident in lower retailer confidence. Food and fuel retailing now comprise larger shares of household spend than five years ago and have experienced the largest percentage growth in retail spend.

Annual retail sales in the Auckland region and New Zealand grew by 4.3 and 5.5 per cent respectively in the year to March 2008, which is below their annual growth in the previous quarter. The graph below shows the annual percentage growth in retail sales in the year to each month in Auckland city, Auckland region and New Zealand.

In the year to March 2008, there were 1.7 million international visitor arrivals through Auckland International Airport (AIA). This is a 0.49 per cent increase (8274 visitors) from the year to March 2007.

Auckland attracted 69 per cent of New Zealand's international visitor arrivals, slightly down from 70 per cent in the year ended March 2007, and 73 per cent in the year ended March 2004. This is due to stronger growth in other airports -Christchurch, Wellington and Queenstown - during this period. Compared to these other airports, AIA had the second slowest growth in international visitor arrivals since the year to March 1999 and the slowest over the last two years.

Retail sales Annual percentage change

Source: Statistics New Zealand.

Published August 2008