ASB’s latest Regional Scoreboard: Winners and losers

National EV sales were strongest in Auckland, helping the region hold the top spot on the ASB’s latest Regional Scoreboard. Photo / Michael Craig

There are a number of big rises and falls in ASB’s latest Regional Scoreboard, which ranks economic performance by measures including employment, confidence, retail sales and building consents.

Auckland held the top for the second quarter in a row, buoyed by immigration, employment growth, renewed consumer confidence and booming car sales. Electric vehicle sales have been strongest in the city, compared to other regions, and spiked ahead of the December 31 axing of the Clean Car Discount.

Otago slipped from first equal in the last survey to second in the Q4, 2023 ranking. ASB said it was a “strong second” with the highest house price growth at 2.7 per cent (versus the national decline of 0.7 per cent) and employment growth of 6.1 per cent.

There was a more mixed picture in lake and rural areas of the province.

“Hawke’s Bay has smashed this quarter,” ASB said.

The region has been up-and-down on recent score cards but jumped four places in the December quarter.

The region has had year-on-year employment growth of 8.4 per cent, house sales that jumped 15 per cent and a 28 per cent jump in residential consents.

“Continued repairs and rebuilds from weather events are a factor, but there are plenty of other reasons to want to build in the Bay – we’ll be interested to see if the population growth story picks up.”

Wellington jumped six places to eight on the back of a 27 per cent jump in non-residential consents.

“There’s lots of interest in Wellington infrastructure and the work needed on the water network has been in the limelight. Maybe a tunnel plan is coming soon too,” ASB said.

However, the capital also earned a snowflake rating, denoting that ASB anticipates it will cool, losing momentum in the next six to 12 months.

“The coalition government is promising to cut down on government spending, so there’s going to be a cloud hanging over the outlook for Wellington as purse strings get pulled.”

Second from bottom Manawatu-Whanganui, had the largest fall, slipping four places. The region saw employment drop by 2.9 per cent and house prices fall 3 per cent.

National picture: Retail

Looking at the national retail picture, ASB said: “We expect challenges will remain for the retail sector for some time. The full impact of monetary policy tightening hasn’t peaked yet.

“Nevertheless, high net migration and rising house prices can help activity.”

The Warehouse Group’s disappointing first-half result, reported this morning, backed up that picture.

The retail chain said the challenging economy and cautious consumers meant it could not offer guidance for its full financial year.

“Our second half is now underway, and we’ve seen much tougher trade in February with [a] sales decline in the low teens,” the retailer said in an investor presentation.

“In March, we’ve seen some improvement with our sales decline returning to be more in line with the level of decline experienced in our first half.”

National picture: Housing

“House prices can lift over the year ahead in many regions, with strong migration and stabilising inventory levels two key factors,” ASB’s report said.

“However, still-high mortgage interest rates should limit the pace of price rises.”

ASB scoreboard economist Chris Tennent-Brown said while inflation was cooling: “It is too soon to declare mission accomplished for the RBNZ.”

Official cash rate cuts “are unlikely to be delivered until later in 2024,” the report predicts.

Reserve Bank Governor Adrian Orr held the OCR at 5.5 per cent on February 28, shortly after ASB had cut rates and rival ANZ had predicted a hike.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.