The Manawatu and Wanganui region has weathered the COVID storm and come out on top this quarter, shooting up six places to be sitting at the top of the ASB Regional Economic Scoreboard.
ASB chief economist Nick Tuffley says the region’s agri-based economy means the region is more resilient than most. “Manawatu and Wanganui are less dependent on international tourism and should be able to manage the impacts of COVID-19 better than most, which is what we’re seeing shine through this quarter.”
A solid labour market, a healthy construction pipeline, house prices that are holding steady and employment figures that are up more than any other region when compared with this time last year have proven to be a very resilient combination.
“Some are saying it’s the region’s proudest achievement since its two-year Ranfurly Shield reign in the mid-70s.”
The sun continues to shine on Gisborne and the Hawke’s Bay
Gisborne’s winning streak has ended with a third place this quarter, however, the region is continuing to perform well compared with the rest of the country, topping annual house price growth and maintaining a top-tier ranking in annual employment, building consents and retail sales growth.
Neighbouring Hawke’s Bay saw a slight lift in fortunes, climbing one spot into second place on the table. Some of the positive trends seen last quarter continued in Q2 and, unsurprisingly, Hawke’s Bay residents were among the nation’s most optimistic in terms of consumer confidence.
“Overall a relatively strong quarter for both regions and we expect this pair will continue to maintain top table rankings over this uncertain period.”
Nelson remains at the bottom of the scoreboard
It may be ‘top of the South’ but Nelson remains at the bottom of the ASB Regional Economic scoreboard for the second quarter in a row.
The absence of international tourists appears to be weighing heavily on the region with consumer confidence in the upper South Island very pessimistic and retail sales among the weakest in the country.
“On a positive note, the region’s employment figures continue to outperform the national average. Construction remains a weakness for Nelson, though there were signs of life in nearby Tasman, with work commencing on a new commercial development.”
It’s been a volatile six months in the Canterbury region which, after a huge rise in ranking last quarter, has fallen nine places to 14th equal.
Statistics across the board were lacklustre this quarter, with retail sales dropping 14.9% and Construction down 26%. House prices saw an increase of 2.6%, however, this was the third lowest change across the country.
“It’s important to note that our regional scoreboard measures growth rates over the past 12 months so some of Canterbury’s fall reflects previously high activity levels, however, it would be good to see these indicators performing better. The region also remains near the bottom of the pack for consumer confidence.”
North Island the place to be as the South trails behind
It’s been a tough six months or so across the country as a whole but the North island is notably outperforming the South this quarter with the lower North Island regions claiming the top four spots on the scoreboard.
In comparison, the West Coast, Marlborough, Otago, Canterbury and Nelson claimed the bottom five spots on the table with a poor performance across a number of measures.
“The Border closure is causing a big and lasting economic impact. Relative to their populations, the South Island regions have historically had higher earnings from international tourists than most North Island regions. That cold headwind is a possible explanation for the Cook Strait divide,” says Mr Tuffley.
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