The Bay's economic confidence has topped the country for the fifth quarter in a row, and the region has the second lowest unemployment figures.

Westpac's latest regional roundup author and industry economist David Norman said unemployment in the region continued to plummet, reaching just 4.6 per cent in the March quarter - down from 5.6 per cent in the previous quarter.

"This change is driven by strong construction activity, booming tourism and a solid outlook for the region's horticulture sector.

"Other indicators of the buoyant outlook, such as sales of commercial vehicles and house prices, were also on the up," he said.


Mr Norman said the region also recorded the strongest annual house price growth in the country, but to some extent the region was catching up after several years of slow growth.

Tauranga Chamber of Commerce chief executive Stan Gregec said the latest figures showed Tauranga was surging ahead on all fronts, and the growth was not a "flash in the pan".

"It's great to see the employment statistics looking so good for our sub-region. Having said that, some sectors are struggling to find the skilled staff they desperately need," he said. "The business mood out there is still very buoyant - and this doesn't look like changing anytime soon."

Priority One chief executive Andrew Coker said the results were not surprising as all industry sectors in the region were performing strongly, including the kiwifruit industry.

Mr Coker said the results also brought challenges for some employers struggling to find skilled staff, particularly in the construction industry where there was a high demand for structural engineers.

"It's a good problem to have but the region has to continue to work hard to market itself as the most desirable and competitive place to live to attract skilled and talented people."

Paddy Shaw, director of Harper Smith Recruitment firm, agreed.

Strong population growth had positive spinoffs, including creating more jobs in construction, education and the kiwifruit industry but at the same time it created challenges for employers because of the significant skill shortage in the region, he said.

Mr Shaw said more of his clients were having to recruit managers and trained staff from overseas as employers competed with other regions, including Auckland.

Tauranga mayor Stuart Crosby said the results were definitely good news for the city, but there were still some ongoing challenges which had to be met.

"But what I want to see is that all in our community, particularly our homeless, have the opportunity to benefit from these successes.

"We cannot ignore there are ongoing opportunities, particularly with our young people, to ensure they gain skills so they can also participate and contribute to the growth of the city."

Tauranga Harcourts managing director Simon Martin said the results were great news for the area.

"As a city we were certainly in the doldrums for a few years which was depressing and frustrating for everyone. To see many business owners feeling so happy and positive about the region's economic outlook is so cool."

Mr Martin said it was fantastic to see the city going from strength to strength, and really great to see the city finally come of age.

Ross Stanway, chief executive of Eves and Bayleys Real Estate, said the results were consistent with a lot of activity in the region across a range of sectors and that looked likely to continue for some time yet. Mr Stanway said the region continued to work hard to develop a really broad economic base, and all things were certainly headed "in the right direction".

"One of the challenges, which is a good challenge to have, is work harder to attract more businesses and more investment to the region. I think there is certainly potential to do that," he said.