Wider region tops nation for economic confidence
Gisborne and Hawke’s Bay are ‘‘overwhelmingly positive about their regions’ (economic) prospects and are the most optimistic in the country,’’ says a Westpac survey.
A net 52 percent of Gisborne and Hawke’s Bay households expect their regional economies to prosper over the coming year, according to the Westpac-McDermott Miller Regional Economic Confidence survey for the December 2018 quarter.
“This is a big improvement on the 41 percent posted for the September quarter,” said Westpac chief economict Dominick Stephens.
“The upbeat mood reflects strong population growth, elevated and rising house prices, low unemployment and more jobs.
“The success of the horticulture industry and a bumper grape harvest coupled with lower petrol prices are also likely to have added to the air of positivity, although slightly weaker prices for beef, lamb and mutton may have dampened sentiment in some areas.”
The report said all regions showed an improvement when compared to the previous quarter.
Regional confidence was generally stronger in the South Island, although there were pockets of real strength in Gisborne/Hawke’s Bay, which with Nelson/Marlborough/West Coast were the “standouts’’.
Confidence in Otago and Southland was also high, “although this was less surprising given that they are perennial strong performers”.
Confidence in the big urban regions had also improved, especially in Auckland, which recorded the biggest gains bar none.
“This comes after a prolonged period of pessimism and could reflect the recent sharp drop in petrol prices and interest rates.”
Auckland was also experiencing rising construction activity, a housing market recovery, and falling unemployment.
Canterbury showed some large gains, “although confidence levels have tended to move around a bit as the region struggles to re-orientate itself in the post-earthquake reconstruction period”.
The Westpac-McDermott Miller survey also examines consumers’ views on their own economic situation, producing an index that summarises responses to questions including how respondents view their own financial situation, their current willingness to buy a major household item and the outlook for the national economy.
The Westpac-McDermott Miller Consumer Confidence Index for Gisborne-Hawke’s Bay rose sharply from 105 in September to 115 in the December quarter.
“Consumers in the region are the second most optimistic in the country,’’ said Mr Stephens.
The most optimistic consumers were in Wellington.
Gisbnorne/Hawke’s Bay households were feeling a lot better about their own financial circumstances and were pretty positive about the economy overall, said Mr Stephens.
“This is likely to explain why consumers in this region are more open to buying large household items than they were before.”
The survey was conducted from December 1 to December 11.