After five quarters at the top of the regional economic confidence rankings, the Bay of Plenty has been bumped to second place in the Westpac McDermott Miller September quarterly survey. However, business leaders described the drop as a blip and said confidence in the region remained strong.
"It's not surprising that confidence has eased a little in the Bay of Plenty," said Tauranga Chamber of Commerce chief executive Stan Gregec.
"We've had a pretty good run over the last couple of years, and some would say we were due for a slight dip from the giddy heights we've seen in recent quarters."
The survey found the Bay had dropped seven percentage points from 41 per cent in the June quarter, to 34 per cent in the latest quarter, while Wellington had jumped 31 percentage points to 39 per cent.
Meanwhile, Auckland fell another eight percentage points to three per cent, and is second bottom in the confidence rankings, just ahead of Northland.
The survey measures the balance of households expecting good, as opposed to bad, economic times in the coming year.
The report said the BOP had "finally been dethroned" as optimism in Wellington surged, possibly on the back of strong gains in house prices in Wellington after years of little change.
"This is not to say that the Bay of Plenty is looking much weaker," said the report's author, Westpac industry economist David Norman.
"Optimists still massively outnumber pessimists. It is too early to tell if this quarter's small decline is the beginning of a trend."
Despite being bumped to second, the Bay "remains strongly upbeat, which is unsurprising. The region is enjoying strong population growth, a resultant construction boom, and the benefits of a strong horticulture sector."
Mr Gregec said things were still looking good in the Bay.
"It's just not so overheated - we've already seen house prices come off the boil, so a slightly lower pace of activity is not a bad thing. There's every reason to believe our currently buoyant local economy will continue for some time, judging by the level of building and investment that we are seeing and know about - and everything else that's happening in our region."
Priority One's acting chief executive Greg Simmonds said the survey still reflected very strong confidence in the Bay economy.
"They seem to be suggesting Wellington's optimism is off the back of a strong surge in house prices there," he said, adding that the BOP had seen very strong growth in house prices for some time and was still the top region in terms of job growth.
"There's a high level of confidence across the BOP. Overall, the story is still one of strong positivity and economic confidence for the region."
Rotorua Chamber of Commerce chief executive Darrin Walsh said the region had "taken a little bit of a blip" in the latest survey, but would pop back.
Mr Walsh said he believed confidence levels in Rotorua could be higher than in Tauranga at the moment.
"Tauranga growth has been ongoing for a fair while," he said. "It's been booming and is bursting at the seams." Because Tauranga had been experiencing growth for some time, there could be a sense that it may not continue at quite the same level.
By contrast, Rotorua's economy only started to pick up about 18 months ago, he said.
"Twelve months ago it was going well, and for the last six months it has been going gangbusters and it really looks like it's sustainable for another year or so."