Infometrics Report Predicts Inflation Pressures On Council

An economic report commissioned by the Invercargill City Council has provided some interesting statistics, including the impact of rising inflation.

The ICC contracted Infometrics to provide some economic detail to help with future financial planning, and it clearly backs up what new Mayor Nobby Clark has been predicting.

Clark has been clear he wants to cut $50 million in council spending from the long-term plan, because of rising inflation putting extra pressure on households.

Economists Brad Olsen and Nick Brundson, the creators of the report, ‘Economic Update for Long Term Planning for the Invercargill City Council,’ published in April 2022 agree, that inflation would continue to add cost pressures to councils.

Inflation is expected to peak between 7-8% this year and remain elevated until 2024.

Clark has suggested stopping Stage 2 of the Streetscapes project, stalling the council’s Civic Administration Building upgrade, and canning the museum storage facility at Tisbury.

Other interesting statistics coming out of the report include, that Invercargill is predicted to have an average of 140 new households every year from 2022 to 2034.

Tiwai Aluminium Smelter employs 764 fulltime staff and an extra 1500 contractors and suppliers.

If it closes in 2024, it would take up to four years for the displaced workers to be absorbed into the regional economy.   Extra support for those families would be needed.

The Southern Institute of Technology had 980 international students back in 2019, and that dropped 26% in 2020.  This was unlikely to recover for 10 years.

The current rate of inflation is the fastest growth since the June 1990 quarter.