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Gisborne King Of The Scoreboard Castle For 2019
The sun has certainly been shining on the first city in the world to see it, with Gisborne retaining its gold medal for three consecutive quarters.
House price growth, retail sales and construction have all topped the nationwide ranks over the quarter, with Gisborne also on an excellent run with its diverse mix of exports.
“We hate to be the party pooper in this situation, but we fear the good times will not extend into 2020,” says ASB chief economist Nick Tuffley.
“In particular, the forestry sector has been hard hit by the disruptions caused by the coronavirus, with Gisborne sharing some of this burden. The meat sector being affected, too. That perhaps leaves the region’s horticulture sector to do the heavy lifting over the first half of 2020,” says Tuffley.
The mighty Waikato climbs 11 spots into bronze position
After languishing near the bottom of the table last quarter, Waikato has jumped 11 places, taken out the bronze medal and claimed a four-star rating this quarter.
“The region’s retailers had a good quarter, and so did vehicle dealerships. Perhaps the region’s farmers also got their cheque books out on the back of record meat prices and the improving milk price,” says Tuffley.
“It seems in some cases that joy may be short-lived as the coronavirus outbreak and local drought combine to send rural incomes back to earth, at least temporarily,” says Tuffley.
Solid Otago on shaky ground
Much like its rugby team, the success of Otago in the coming few months is uncertain. Having posted solid, but not spectacular, results across most measures this quarter, the region has risen to sixth on the Scoreboard.
Looking ahead however, the future is slightly less clear.
“If we were to single out one measure, new car sales annual growth was the second-highest in the country over the quarter. However, looking ahead to 2020, we are mindful that coronavirus will have an oversized impact,” says Tuffley.
“Queenstown is likely to feel the pinch of a drop in international tourist numbers, while Dunedin is likely to suffer a similar fate in terms of international student arrivals. For both the tourism and education sectors, the outbreak couldn’t have come at a worse time,” says Tuffley.
Hawke’s Bay plummets after a previously consistent performance
The Hawke’s Bay was this quarter’s biggest mover – unfortunately in the wrong direction. The region slid nine spots to 11th in this quarter’s Scoreboard, after sitting in the top five for more than a year prior.
However, given the boomer growth in the retail sector over the past year or so, some moderation in sales growth is to be expected.
“Moreover, the region’s key industries are in good shape fundamentally. That said, the meat and forestry sectors have a particularly bumpy start to 2020 to navigate ahead,” says Tuffley.
Northland gets the short end of the stick
Northland has slipped two spots to 12th in this quarter’s Scoreboard, with Northlanders equal most pessimistic in the country.
“Unfortunately, we think the first half of 2020 will be a challenge up North. Indeed, Northland has been hit hard by drought, and its tourism, forestry and meat industries are exposed to any fallout from the coronanvirus outbreak.
“Taking the glass half full view, it has been a cracking Northern summer,” says 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
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