ASB / Main Report Regional Economic Scoreboard

Tuesday, 24 November 2015, 4:25 pm
Press Release: ASB Bank

November 24 2015

ASB / Main Report Regional Economic Scoreboard

The Bay of Plenty has knocked Auckland from top spot as New Zealand’s best-performing region in the latest ASB/Main Report Regional Economic Scoreboard.

The move, up from second place on the scoreboard, comes as the Bay of Plenty continues to outperform on jobs growth and enjoys a strong housing market.

ASB chief economist Nick Tuffley says the Bay of Plenty has much to boast about this quarter as it finally takes first place from Auckland.

“We’re hearing stories about happy, cashed-up Aucklanders moving to the region. Indeed, house sales, house prices and construction were all star performers for the Bay of Plenty over the quarter.”

Auckland slipped to second-equal in the rankings this quarter as a degree of softness crept into Auckland’s labour market, with employment growth on par with the national average. Consumer confidence also took a hit, and is sitting at the lowest level in three years.

On the other hand, Mr Tuffley says strong migration continues to boost Auckland’s population growth, supporting retail and car sales, as well as house prices.

“These factors suggest it is the sheer growth in numbers keeping Auckland churning at the moment,” Mr Tuffley says.

Northland and Waikato are also basking in Auckland’s “halo” effect”.

In Northland, house prices, retail spending, construction, new car sales and guest nights all provided a boost to the region’s ranking – up three spots to second equal. But Mr Tuffley notes Northland’s employment growth – below the national average – needs to keep pace in future quarters.

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In fourth position, Waikato’s economy remains strong despite the dairy downturn. In particular, housing is strong, with sales doubling over the quarter compared to a year ago, and house prices continuing to increase.

Taranaki has been downgraded on the scoreboard to two stars as the region continues to struggle due to the twin downturns in dairy and energy.

“With its two main industries under a cloud, it’s not surprising to see unemployment rising and spending down. Construction activity is also falling, particularly in the commercial sector.

“It will probably take a pick-up in the dairy sector for a more general improvement in the Taranaki’s fortunes,” Mr Tuffley says.

Although growth in Canterbury is slowing, the return of tourists to the region is a bright spot. Mr Tuffley says Cantabrians remain upbeat, with consumer confidence clocking in the second-highest reading nationally.

“All things considered, the transition from a rebuild-led economy to business as usual will be tricky for the regional economy. In that sense, it will be difficult for Canterbury to hold on to its five-star rating over 2016.

Q3 biggest movers

Gains:

• Bay of Plenty tops the scoreboard, knocking Auckland back to 2nd equal.

• Northland gains a star to 4 stars, with the Auckland housing market “halo effect” in action.

• Gisborne gains a star to 3 stars and is top equal in terms of retail spending.

• Southland gains a star to 3 stars, with construction activity up strongly.

• Waikato strong despite dairy downturn; in particular housing is strong and the Waikato is still in fourth place overall.

Losses:

• Wellington mediocre at best on most measures; down to 2 stars.

• Nelson loses a star to 2 stars.

• Taranaki struggles against the twin downturns in dairy and energy.

• Marlborough loses a star to 2 stars.

ASB/Main Report Regional Economic Scoreboard Q3 2015

1 Bay of Plenty
2 = Auckland
2 = Northland
4 Waikato
5 Canterbury
6 = Hawke's Bay
6 = Otago
8 Southland
9 = Tasman
9 = Nelson
11 Manawatu-Wanganui
12 Gisborne
13 Marlborough
14 West Coast
15 = Taranaki
15 = Wellington

About the ASB/Main Report Regional Economic Scoreboard

The ASB/Main Report Regional Economic Scoreboard takes the latest quarterly regional economic statistics and ranks the performance of New Zealand’s 16 regional council areas. The fastest-growing regions gain the highest ratings and a good performance by the national economy raises ratings across the board. Ratings are based on measures such as employment, construction, retail trade and house prices.

The full report is attached and available online at www.asb.co.nz

ENDS

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