APRIL- MAY 2022 formance of Manufacturing Index (PMI) recorded an index of 52.1 in January 2022. (A PMI reading above 50 indicates that manufacturing is expanding, below 50 signifies that it is contracting). With the exception of August 21, a month impacted by a COVID-19 enforced national lockdown, the PMI has registered growth every month since December 2020. Of the main sub-indices only employment registered contraction. The strongest results were delivered by Deliveries (53.8) and New Orders (53.3). New Zealand’s rating compares favourably with both Australia and China, which, according to J.P. Morgan’s Global Manufacturing PMI index, experienced contraction in the opening month of the year registering ratings of 48.4 and 49.1.
Retail Sector Retail leasing conditions in major CBD markets remain challenging as a result of Covid-19 impacts on pedes-
trian counts, inflation, staffing and consumer spending activity. Auckland CBD vacancy has reached a record high 14%, while Wellington’s vacancy remains more resilient at 4.9%, below the 25-year average. While CBD prime rents have increased over the past decade in NZ and Australia, the gap between rents for the two country’s remains high. With ongoing border limitations in NZ versus an opening in Australia’s border restrictions and a return of CBD office workers, the gap is likely
to increase further moving forward. Figures from Stats NZ show that actual retail card spending totalled $6.35 billion in January 2022, up $344.75 million (5.7%) on the January 2020 figure. Core retail spending increased by $273 million influenced predominantly by a 9.4% increase in spending on consumables and a 5.7% lift in sales of durables. Only the hospitality sector saw a decline in sales values with total spending contracting by 2.9%. The expansion of online
retailing has accelerated over the last two years. Figures released by NZ post show that in 2021 online spending reached $7.67 billion. This represents annual growth of 21% which, following a huge year of growth in 2020, sees online spending now 52% larger than it was pre-pandemic.
NZ’s Offshore Sales Activity Despite NZ’s closed borders, offshore investment activity remains a highlight of NZ’s transactional market, a feature highlighted by the recent GIC/Precinct announcement. While Russia’s invasion of Ukraine is elevating risk and uncertainty on international investment decision making currently, NZ’s ‘safe haven’ appeal will continue to remain a positive feature. With border restrictions gradually easing in NZ, more so in the second half of 2022, a boost in offshore sales activity is expected that will lift overall sales values back in line with more recent sales trends over the past few years. colliers.co.nz propertyandbuild.com 89
