ASB / Main Report Regional Economic Scoreboard

Thursday, 25 August 2016, 12:13 pm
Press Release: ASB Bank

Media alert
August 25 2016

ASB / Main Report Regional Economic Scoreboard

The Bay of Plenty’s winning streak continues as it keeps a firm grip on its spot as New Zealand’s top-performing region for the fifth straight quarter in the latest ASB/Main Report Regional Economic Scoreboard.

ASB Chief Economist Nick Tuffley says the Bay of Plenty economy continues to shine on all fronts.

“The Bay’s key drivers remain strong this quarter, with guest nights up a staggering 26% for the year. And once again, the region’s seasonal kiwifruit and horticulture exports are buoyant,” Mr Tuffley says.

But while the region’s housing market is charging ahead on price and construction fronts, signs are showing this may come to an end.

“With new housing restrictions on the way we caution that the Bay’s house price gains can’t last forever,” Mr Tuffley says.

The further restrictions are likely to have an impact on housing markets across the country in future quarters. But for now, with exceptions on the West Coast and in Canterbury, house prices and record-low interest rates are translating into a nationwide construction boom.

Movers and shakers

Nelson proves to be the biggest mover on the Scoreboard this quarter jumping up to fourth place thanks, largely, to the housing market.

“Up six spots, Nelson’s housing market is back in favour as the region records double-digit annual house price growth, one of only six regions to do so,” Mr Tuffley says.

“However, outside the housing market, Nelson is a mixed bag. While the region continues to ride the nationwide tourism wave, strangely, retail sales are down on this time a year ago.”

Auckland continues to grow at a rapid rate of knots, with the construction sector a clear winner, and retail hot on its heels. Sign-off on the Auckland Council’s Unitary Plan was likely to have been the city’s biggest news this quarter (although strictly speaking it falls into next quarter).

“The Unitary Plan sign off, while not perfect, paves a way ahead for the country’s biggest city’s development. The plan provides confidence that, over the long term, solutions to Auckland’s housing crisis can be found,” Mr Tuffley says.

Strong retail nationwide

New Zealand’s retail sector was hot over the June quarter and, alongside construction, was the brightest star over this period. It’s also little surprise that sales in housing-related categories are booming.

After a strong March quarter, Hawke’s Bay dropped eight spots and loses a star this quarter.

“Both the local housing market and retail sales were solid in the Hawke’s Bay over the June quarter. However, it appears locals are not convinced the region’s good fortunes will last.

“Consumer confidence is the region’s main drag,” Mr Tuffley says.

Taranaki props up the bottom of the Scoreboard this quarter. Weak oil and dairy sectors are weighing hard on the region’s fortunes but, as with most of the country, retail is a shining light for the city. Dairy, too, is looking up.

“With dairy prices already bouncing over August, there is a light at the end of the tunnel for Taranaki,” Mr Tuffley says.

ASB / Main Report Regional Economic Scoreboard for Q2 2016

About the ASB/Main Report Regional Economic Scoreboard

The ASB/Main Report Regional Economic Scoreboard takes the latest quarterly regional economic statistics and ranks the 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 ratings across the board. Ratings are based on measures such as employment, construction, retail trade and house prices.

The full report is attached and available online at www.asb.co.nz

ENDS

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