Gisborne The Country’s Top Performer In ASB’s Latest Regional Economic Scoreboard

Tuesday, 24 September 2024, 9:15 am
Press Release: ASB

• Gisborne claims first place on the leaderboard for first time in more than four years
• Biggest drops seen in Southland, down from first spot to ninth, and Marlborough, falling from fourth place to second-to-last
• Despite signs of optimism in housing market and export growth in some regions, economic outlook to remain sluggish until 2025

Growth is on the horizon, according to ASB’s Regional Economic Scoreboard released today. The Scoreboard ranks regions based on year-on-year growth across a range of measures, including employment, building consents and retail sales.

Scoreboard data for the April to June quarter paints a fairly bleak picture but ASB Senior Economist Chris Tennent-Brown expects inflation pressures to ease further by the end of the year, leading to a brighter 2025.

“The unemployment rate rose to a three-year high of 4.6% in Q2, and we expect this to move above 5% by the end of the year. The construction outlook remains soft and household spending is weak, as cost of living pressures bite.

“However, we’re seeing some positive signs in the housing market with house sales increasing by 6.8%, and prices rising by 2.2% this past quarter, and we can expect it to pick up with a bit more speed in 2025.

“Exports for Q2 were $26.26bn, up from $25.99bn a year ago, with dairy still our most attractive offering. Our 2024 growth forecasts for some of our key trading partners have been revised higher which is good news for the country. Much like the rest of the economy however, growth is expected to remain below average for 2024, with weakness in China a concern.”

Gisborne claims top spot on scoreboard

For the first time in more than four years, Gisborne has claimed the top spot on the scoreboard, largely due to the post-cyclone rebuild in the region. Annual construction consents rose sharply by 40.8%, driven by a 152.8% increase in non-residential building. Annual house sales growth was the second highest in the country at 25.8%, and employment performed well, growing 3.6% year-on-year and exceeding the national average of 1.6% growth.

“It’s fantastic to see Gisborne make a comeback on the scoreboard, and we saw the same post-cyclone rebuild having a positive impact for Hawke’s Bay in the rankings last year. We expect this forward momentum for the region to continue in the short-term.”

Otago and Canterbury round out the podium

Otago remained steady in second place, while Canterbury climbed four spots to claim bronze, with both regions differentiating themselves from other parts of the country.

Otago generated the highest house price growth across the country, which rose 4.4% annually at double the national 2.2% average. Otago also showed strength in the labour market, with employment increasing 5.5% annually, the strongest pace of all the regions. Meanwhile, Cantabrians’ above-average consumer confidence showed in their spending, with retail sales growing at the fastest rate in the country at 2.5% annually, compared to a decline of 0.4% nationwide.

Marlborough and Southland see biggest declines to scoreboard positions

Marlborough’s position in the top four in Q1 was short-lived, with declines across construction, real estate and employment informing the region’s second-to-last placing. Tennent-Brown says the region’s most famous export could be the key to growth in future quarters.

“Marlborough enjoyed a spectacular 2024 wine season and if wine exports pick up as we head into summer, the region could see some much-needed momentum in the next 6-12 months.”

The full ASB Regional Economic Scoreboard, along with other recent ASB reports covering a range of commentary, can be accessed at our ASB Economic Insights page: https://www.asb.co.nz/documents/economic-insights.html

@ASBBank @ASBMarkets www.asb.co.nz

The full report is attached here.

About the ASB Regional Economic Scoreboard

The NZ Regional Economic Scoreboard takes the latest quarterly regional statistics and ranks the economic 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 the ratings of all regions. Ratings are updated every three months, and are based on 11 measures, including employment, construction, retail trade, and house prices.

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