Oil, gas prices boost Taranaki’s growth

Booming oil and gas prices and strong dairy exports are helping Taranaki grow faster than the rest of New Zealand, but the South Island economy is again outperforming the North Island.

The National Bank's regional trends survey showed Taranaki was the strongest growing regional economy with 2.2 per cent growth in the March quarter and annual growth of 6.1 per cent.

The region has held the top position since last September.

Taranaki was the only region to record positive business confidence in the March quarter and had the biggest increase in housing approvals and hotel guest nights.

Of the biggest regions, Canterbury's quarterly growth of 1.8 per cent and Wellington's 1.5 per cent again outperformed Auckland's 0.6 per cent and the national average of 1.1 per cent.

Auckland, which is struggling with infrastructure bottlenecks and slowing house price growth, failed to keep pace for the fourth successive quarter.

But house-price growth in the regions again mirrored closely economic growth figures for most areas.

The Nelson-Marlborough region, which is one of the few areas recording a drop in house prices, had 0.2 per cent growth for the quarter and 2.9 per cent for the year, its lowest level in four years.

"Its relative performance has taken a bigger tumble, with Nelson-Marlborough posting the second lowest ranked growth rate across the regions for the first time since 1977," National Bank economist Steve Edwards said.

Economic activity in Wellington outgrew the national average for the third quarter and the region had the second highest level of consumer confidence in March.

Sharply higher government spending, employment growth and the intense activity involved in making Peter Jackson's King Kong movie kept Wellington's economy humming along faster than most.

The slowest parts of the economy were in Southland with a 0.3 per cent contraction for the quarter, its first quarterly fall in two years, and Gisborne with a 0.5 per cent contraction.

Gisborne's fall followed strong growth in the December quarter.

Meanwhile, Bank of New Zealand's new confidence survey recorded a slight improvement for May, with a net 50 per cent of respondents saying they expected the economy to get worse during the next year.

This compares with a net 62 per cent who were pessimistic in the previous survey.

BNZ economist Tony Alexander said the improvement followed months of worsening sentiment and showed confidence was fluctuating.

"(It is) just the coming together of a number of concerns and perhaps the end of the extended period of positive surprises."

- NZPA