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A NET 27 percent of Gisborne and Hawke’s Bay households expect their regional economies to strengthen over the coming year, according to the Westpac-McDermott Miller Regional Economic Confidence survey for the December quarter.
The confidence level is slightly higher than the 23 percent posted for the September quarter, but down on the 33 percent posted in the June quarter.
“This partial recovery is likely to have been due to growth in tourism, stronger construction activity, and
rising horticultural and viticulture prices, although gains here will have been eroded by a recent weakening
in meat and dairy prices,” said Westpac chief economist Dominick Stephens.
“Increasing unemployment, slowing house sales, and a growing unease about what government policy might mean for the agricultural sector are likely to have loomed large for those that are more pessimistic about the region’s prospects.”
The Westpac-McDermott Miller survey also examines consumers’ views on their own economic situation, producing an index that summarises responses to questions including how respondents view their own financial situation, and their current willingness to buy a major household item.
The Westpac-McDermott Miller Consumer Confidence Index for Gisborne and Hawke’s Bay fell to 105 in the December quarter, from 110 in the previous quarter.
“Households in the region have become less optimistic about the economic outlook for New Zealand as well as their own financial circumstances over the next 12 months,” Mr Stephens said.
Good time for household items“Despite this, more households in the region think this is a good time to spend on large household items, reflecting perhaps a greater confidence in the region’s economic performance over the coming year.”
The 27 percent confidence level is slightly higher than the 23 percent posted for the September quarter, but down on the 33 percent posted in the June quarter.
There were very different trends in regional confidence across the country. Confidence rose in six regions in the December quarter, but was down in five regions.
Auckland stood out, with the number of households that are pessimistic about the region’s prospect now outweighing the number of optimistic.
Confidence declined in the Bay of Plenty, Canterbury and Southland.
In contrast, Otago and Waikato both enjoyed sizeable lifts in economic confidence.
In Auckland, negativity has been driven by developments in the housing market and concerns about what the new
government’s policies might mean for it.
The impending imposition of a regional fuel tax to fund public transport projects may have also been a contributing factor.