Auckland economy tops regional scoreboard
Auckland has scored top spot in the latest ASB Regional Economic Scoreboard.
Auckland construction activity – especially non-residential – has picked up considerably in the last quarter.
Second place went to Southland, where consumer confidence is now the highest in the country.
The top half of the South Island is performing well, due to the relocation of people from earthquake affected areas, with Tasman and Nelson both edging towards the top of the table.
Canterbury remains in the top half of the rankings, despite the challenges presented by the earthquakes, and there are encouraging signs for recovery in the region.
The ASB Main Report New Zealand 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 measures such as employment, construction, retail trade and house prices.
An economist’s overview
“As Auckland geared up for the Rugby World Cup, the number of jobs in the region increased strongly, as did retail sales,” said ASB Chief Economist Nick Tuffley. While consumer confidence dipped slightly from a strong June quarter result, Auckland’s overall level still remains on a par with most other regions.
But Mr Tuffley said Wellington continued to slide in the rankings, dragged down by a slow housing market. “Despite the city hosting some of the best on-field action of the Rugby World Cup, retail sales recorded only modest growth, and employment declined over the past year.”
There may be more of an impact seen in the next quarter’s data, which will include the knock-out stages of the tournament when the capital’s residents turned out in force.
Canterbury remains in the top half of the rankings, despite a contraction in population and a sharp drop in employment. Statistics NZ reported that the population of Christchurch city declined by 2.4% in the year to June 2011. Some CDB businesses still remain closed due to extensive earthquake damage.
But there are some encouraging signs for recovery in the region. Mr Tuffley said the housing market activity has rebounded from the sharp declines in house sales immediately after the earthquakes, suggesting underlying housing demand remains in the region.
“Consumer confidence in the region is also higher than the nationwide average, a testament to true Cantabrian spirit.”
Rebuilding over the coming years is expected to progressively support a regional recovery in construction activity.
Otago remains in the bottom half of the rankings. While there were recent signs of a stabilisation in the housing market, retail sales remain lower on year-ago levels and regional construction activity is weak.
“Despite Dunedin’s new stadium being an undoubted Rugby World Cup hit and the region experiencing a sudden influx of English tabloid journalists, guest nights remain weak and consumer confidence in the region remains low compared to the rest of the country,” said Mr Tuffley.
He said a sustained strong growth in visitors from China into New Zealand would likely provide an ongoing opportunity for the region, “and a more sustainable one than the niche created for bald-headed Englishmen.”