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Northland Takes Top Spot on ASB Regional Economic Scorecard

Press Release – ASB Bank

Holiday makers a-plenty in the Bay pushes the Bay of Plenty up nine spots to third placeNorthland Takes Top Spot on the ASB Regional Economic Scorecard
• Holiday makers a-plenty in the Bay pushes the Bay of Plenty up nine spots to third place

• Five-plus-a-day proves fruitful for all three top regions securing their medal places

• While drought drags down central North Island regions Taranaki and Manawatu-Whanganui
A summer to remember for Northland as it climbs 6 spots to be the best performing region

Northland owned the summer of 2018, outperforming the rest of the country in the latest ASB Regional Economic Scorecard, and nudging Tasman from top spot last quarter.

The key to the Northland region’s success climbing to 1st place from 7th, has been solid 5 star ratings across all the measures, from employment, construction, retail trade, to house prices and new car sales, says ASB chief economist Nick Tuffley.

“Northland added a healthy 4.6% more jobs over the year and not surprisingly this growth then spilled over into the retail sector, where annual growth sales grew at over 5%. No doubt, the good summer weather contributed to consumers in the area slip, slop, slapping, and spending this summer and in doing so secured Northland top regional honours.”

Holiday makers move the Bay of Plenty up 9 spots to third place

The sun’s rays also shone brightly on the Bay of Plenty, with holiday makers moving in and bringing their cash with them.

“Accommodation was bursting at the seams and visitors to the Bay packed their wallets and spent locally. As a result, the region benefited substantially, pushing its economic performance from a ranking of 12 in the previous quarter to third place over the summer months,” Tuffley says.

However, one drag on the Bay of Plenty region over the quarter was employment – with the Kiwifruit sector failing to fill vacancies during the peak picking season.

“That said, the kiwifruit export season is set to shatter previous records in terms of returns, and on that basis, with regional incomes strong, the Bay may be set for a prolonged spell towards the top of the Scoreboard,” Tuffley says.

Housing and horticulture strong influences for top three

It was housing that kept Tasman in the top three. Although it slipped from 1st to 2nd, Nick Tuffley says house prices remain strong and so too does the labour market.

“The construction pipeline is also full, and we expect from here the outlook will continue to be favourable for Tasman. Plus, a strong horticulture sector is having a positive impact on Tasman, as it is on the local economies of the other top regions – Bay of Plenty and Northland,” Tuffley says.

Weather woes wreaked havoc for others

Having a negative effect on some regions was the weather. The central North Island regions of Manawatu-Whanganui and Taranaki were dragged to the bottom of the ASB Regional Economic Scorecard by drought, rounding out the Scoreboard at 15 and 16 respectively.

“The Taranaki region was one of the worst-hit by drought over summer and with this in mind, it’s not that surprising consumer confidence was the weakest in the country over the quarter.”

Unfortunately, Tuffley says, from here it may get worse before it gets better for the Naki. “The Government’s decision in April to cease issuing permits for offshore oil exploration will begin to filter through into the Scoreboard’s indicators from next quarter.”

For the Manawatu-Whanganui region, drought too dented agricultural production.

“The weak labour market remains the region’s Achilles heel, as the number of jobs continued to fall over the year. But the region is expected to recover and climb back up the Scoreboard on the back of otherwise healthy agricultural incomes. Also, it’s worth remembering the Government’s ‘free first year’ of tertiary study policy, which would potentially see Palmy swell with students all keen to spend locally,” Tuffley says.
ENDS

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