Challenges And Optimism For Christchurch's Economy In 2024

It will come as no surprise that 2024 was a tough year for Christchurch’s economy, with growth stagnating at just 0.4% over the year to September. National GDP growth remained flat at 0%, highlighting the broader economic slowdown. The lingering effects of the cost-of-living crisis and the Reserve Bank’s interest rate hikes left many feeling stuck in a holding pattern, with “survive until 25” a common mantra.

One of the most noticeable shifts in the economy was in the labour market. As the economy slowed, so too did demand for workers. With fewer job openings and more people competing for available positions, the number of applicants per Seek job advertisement in Canterbury jumped by 45% in September, compared to the same time in 2023. This trend reflects deepening challenges in the job market, and it’s clear the shift is not a short-term blip. The impact of these slower economic conditions on the workforce will likely continue into 2025. However, there’s a glimmer of hope: Reserve Bank forecasts now suggest that unemployment will peak sooner and at a lower level than previously expected.

The retail sector, a key part of Christchurch’s economy, also faced its share of difficulties in 2024. A decline in consumer spending – particularly on non-essential items like clothing and homewares – has been a defining trend. As people tightened their belts, spending on essentials like groceries and bills took priority. In-store card spending dipped into negative growth, with fewer people heading out to shop.

For many, the economic pressures of 2024 meant cutting back on the luxuries, but for others, even the essentials have become out of reach. The latest Census data highlights a stark reality: homelessness in Christchurch has risen to 6,700 people – around 1.7% of the population – up from 1.3% in 2018. This statistic sheds light on a different kind of deprivation – those living in temporary housing or in homes that are uninhabitable. Christchurch has a higher proportion of people in uninhabitable housing than the national average, a reminder that hardship often remains hidden behind closed doors.

Despite the tough times, there’s no shortage of reasons for optimism in Canterbury as we enter 2025. After a slow start to 2024, both business and consumer confidence saw significant improvement. A steady decline in inflation and the recent cuts to the official cash rate (OCR) have helped ease some financial pressures, and this has been reflected in a surge of positive sentiment. Westpac’s consumer confidence index for December shows that Canterbury has moved back into optimistic territory for the first time since September 2021. In fact, confidence here is higher than in most other regions across New Zealand, driven by falling borrowing costs and growing optimism about 2025.

Business confidence has also rebounded. Business Canterbury’s latest quarterly survey reveals a surge in confidence, with a net 57% of businesses expecting stronger financial outcomes in the coming months, the highest level since mid-2022. The outlook for 2025 is also promising, with further cuts to the OCR expected to keep confidence levels elevated. This positive shift in business and consumer sentiment suggests that Christchurch may be entering a period of recovery and growth, despite the challenges of the past year.