Economic confidence high in Bay of Plenty

Economic confidence is high in the Bay of Plenty, according to a new report. Photo - Alan Gibson.

The Bay economy is "firing on all cylinders" but could get better with an even larger slice of the tourism action, according to latest reports.

Regional economic confidence in the Bay of Plenty is the second-highest in the country, according to the latest Westpac Regional Roundup.

Regional employment confidence was also positive, according to the report.

The unemployment rate continued to trend down and was in the mid 5 per cent range, compared to 6 per cent a year ago and an average of 6.5 per cent over the past five years.

Passenger vehicle registrations, commercial vehicle registrations, and house sales and prices all remained strong.

House prices were up 27 per cent for the year, the fastest growth of any region.

The population was expected to continue experiencing strong growth for the next 12 to 18 months. That would support house prices, retail spending and business confidence.

"As a result, we expect to see strong growth in construction-related employment and in the services that support construction.

"Consent numbers are expected to remain strong. This activity will also help keep the unemployment rate low."

The report said it was possible the Bay of Plenty might benefit as tourists were priced out of some of New Zealand's other tourist destinations.

"Tourism is one area where the region has not grabbed its share of the growing pie."

It said the Bay of Plenty had flattened a little after a year and a half of having the most promising outlook of any region.

Tauranga Chamber of Commerce chief executive Stan Gregec said the region had been on fire for the past two years, and a slight slowdown was probably just what the doctor ordered.

"Business confidence is still strong across the board, and not just in the hot sectors of horticulture and Tauranga building and construction.

"Tauranga has a strong emerging high technology sector and new ventures such as 3D metal printing. I think we will see more and more businesses like this in the near future."

He said retail was a sector that is always fluctuating, but most local industries were "firing on all cylinders" at the moment.

"There's nothing surprising in these latest figures - it's really a continuation of the strong growth we have seen in the last two years," said Mr Gregec.

Westpac's Regional Roundup said nationwide, business confidence and hiring were on the rise and the pipeline of construction work was strong.

Migration, as a major driver of population and GDP growth, remained remarkably strong. Half of that migration growth was due to a reduction in New Zealanders leaving.

The outlook for the country overall was a lot more positive on the back of a happier dairy sector.

Other commodities, such as horticulture, wine and forestry were recording strong export growth.

HIGHLIGHTS
Unemployment in the mid 5 per cent range
House prices up 27 per cent
Strong population growth expected to continue
Passenger vehicle and commercial vehicle registrations remain strong