How confident are you in the Bay of Plenty's economic future? A new survey has delved into how Bay households feel about the Bay's economy and business experts have listed a number of reasons as to why people may not feel certain about the economy's future. Reporter Zoe Hunter takes a deeper look into the Westpac-McDermott Miller Regional Economic Confidence survey and asks experts what they think has contributed to a 10 per cent drop in confidence.
The future looks bright for some Bay of Plenty businesses but others are recognising the growing uncertainty, experts say.
Fingers have been pointed at log prices, less harvesting activity and job losses as the likely reasons for a 10 per cent drop in the Bay's economy in the last three months.
A Westpac-McDermott Miller Regional Economic Confidence survey found only nine per cent of Bay households expected their region's economy to improve in the next year.
Nineteen per cent of households had confidence in the region's economy in the previous quarter.
The Bay of Plenty was one of 11 regions surveyed nationwide that recorded a decline in regional confidence.
Tauranga Chamber of Commerce chief executive Matt Cowley said many businesses were realising the growing uncertainty.
"The future work pipelines of a number of businesses is reducing, such as construction and signwriting companies," he said.
Cowley said temp recruitment agencies were also experiencing strong demand for short-term staff.
"This suggests local businesses are acting cautiously about the next few months."
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Westpac chief economist Dominick Stephens said the impact of global headwinds had resulted in sharply lower log prices, less harvesting activity and job losses.
"This is also likely to mean slower log volumes through the Port of Tauranga."
Stephens said a slightly smaller kiwifruit harvest might have also contributed to the drop in confidence, however, it did not stop growers from increasing exports to China and Japan.
House price inflation also continued to slow, he said.
Te Puke Economic Development Group chief executive Mark Boyle said there was high confidence in the "Bay's big economic driver" - kiwifruit.
Boyle said there was also increasing demand for industrial land, which proved a confidence boost in the economy's future.
Priority One chief executive Nigel Tutt said the region's economy remained strong and it was expected that global and domestic factors will dampen confidence.
"Locally, we should be mindful of the impact that house price inflation has had in other regions."
Rotorua Chamber of Commerce chief executive Bryce Heard said the manufacturing industry was experiencing postponements but no cancellations.
"Orders are slowing but they are not losing them. The signs are there is a bit of a slowdown but not comparable to a global economic crisis."
Heard said there was also uncertainty in the primary sector following changes to the rules of land use.
"There is concern among landowners about what they are and not going to be able to do."
Timberlands chief executive Robert Green said the impact on log prices affected different businesses differently.
Green said his business, which employed about 700 people, had experienced no job losses. "We continue to operate effectively. Everybody is busy, active and employed."
The survey was conducted from September 1 to 12, 2019.