NZ economic activity slips in March quarter

Photo / Simon Baker

Nationwide economic activity fell 0.1 per cent during the March quarter, the National Bank says in its latest Regional Trends report.

The bank says eight regions recorded a rise in economic activity during the March quarter, with six regions recording a drop.

Unsurprisingly economic activity in Canterbury took a big hit from the February 22 Christchurch earthquake, resulting in that region's largest quarterly drop in economic activity since the start of the National Bank series in 1975.

Overall, economic activity in the South Island dropped 1.7 per cent, while the North Island recorded a 0.3 per cent rise in activity.

New Zealand, excluding Canterbury, recorded a 0.2 per cent rise in economic activity.

However, when compared with the previous quarter, year-on-year economic growth slowed across all regions.

At -0.2 per cent, Northland recorded the lowest annual average rate of economic growth, slightly weaker than Canterbury's -0.1 per cent decline.

In contrast, the West Coast and Otago had the equal top annual average rate of economic growth, rising 2.8 per cent from a year earlier.

The annual average rate of economic growth for New Zealand as whole was 1.2 per cent, the National Bank said.

At 1.4 per cent the North Island had twice the rate of increase of the South Island's 0.7 per cent.

"Not surprisingly, the Christchurch earthquake dented economic activity in the region, although some of the monthly indicators were beginning to recover prior to the event," the National Bank said.

"Canterbury recorded the lowest level of consumer confidence in New Zealand, but the level of sentiment remains higher than during darkest period of the global financial crisis."

The bank said the number of house sales in Canterbury plummeted 26 per cent from the December quarter and new car registrations dropped 15 per cent.

The level of surveyed employment and Paymark electronic sales volumes both fell 1 per cent.

- INTEREST.CO.NZ