A new report has considered the level of employment, house prices, building consents, retail sales and consumer confidence in each region. Photo: RNZ
- Westpac report -- most regional economies remain in a cold snap
- One region has mild performance -- the best ever seen
- Agricultural export regions doing better than cities
- On scale ranging frosty to hot -- eight regions frosty or cold, two regions manage midpoint cool, one mild
- Signs of recovery -- businesses say not going backwards anymore
The warmth of economic recovery is approaching, but most the country continues to shiver in an economic cold spell, according to a new report from Westpac bank.
The bank's latest look at regional economies has the best one -- Otago -- just above the mid point rating at "mild" on a scale between frosty and hot.
Eight regions, including all the North Island and the top of the South Island, rated at the bottom of frosty and the second worst, cold.
Senior economist Satish Ranchhod said most regions were still suffering from weak demand, with the retail and construction sectors doing it toughest, but there were signs of improvement.
"While conditions remain challenging, businesses have told us that they aren't going backwards like they did over the past year."
"In some parts of the country, we're seeing early signs that those wintery conditions are starting to thaw, with several businesses reporting signs of a modest lift in demand, albeit from a low base."
The report was based on the level of employment, house prices, building consents, retail sales and consumer confidence in each region.
Warm down south, cold up north
Ranchhod said Otago, including the tourism hotspot of Queenstown and a large rural hinterland, was the best performing region.
"Conditions in the region have been buoyed by both the firmness in the agricultural sector, as well as increases in international tourist spending."
Canterbury and Southland were the next best regions, both supported by the rural sector.
"Rural regions, especially those in the south with large dairy sectors, are seeing firmer conditions than elsewhere," Ranchhod said.
Better south than north
However, the North Island and particularly the big cities, Auckland and Wellington, were struggling.
"Ongoing pressure on household finances and related low levels of confidence are continuing to weigh on spending," Ranchhod said
The jobs market remained soft with firms not shedding staff to the same extent, but also too cautious to hire.
Firms still faced cost pressures, particularly for insurance and rates, but not wages, and profit margins were not under the same pressure.
Ranchhod said lower interest rates were expected to gradually work their way through the economy and in time should start to spark improved consumer activity and broader economic activity.
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