Businesses not buying consumer confidence report

A new report blames low consumer confidence for a poorly performing Hawke's Bay economy but local business stalwarts disagree.

The region's performance in the past quarter has been ranked the fourth-lowest in the country in the latest ASB/Main Report Regional Economic Scoreboard - eight places down from the first quarter.

The scoreboard takes the latest quarterly regional economic statistics and ranks the performance of New Zealand's 16 regional council areas. The fastest-growing regions gain the highest ratings, based on measures such as employment, construction, retail trade and house prices.

ASB chief economist Nick Tuffley said that, after a strong March quarter, Hawke's Bay dropped eight spots and lost a star this quarter, now resting on three stars.

"Both the local housing market and retail sales were solid in the Hawke's Bay over the June quarter. However, it appears locals are not convinced the region's good fortunes will last," he said.

"Consumer confidence is the region's main drag."

However, Hawke's Bay had shown annual growth in five industry areas, from new-car sales to house prices. The region had a 2.7 per cent share in the national economy and employment was up 4.4 per cent.

Hawke's Bay Chamber of Commerce chief executive Wayne Walford said there was a feeling of buoyancy in the region's economy, as people "loosen their purse strings" as house prices continue to rise. That had also led to some retail growth as businesses looked to bring more retail to Napier and Hastings or expand existing shops.

Businesses were also looking for more opportunities to grow and develop, through a range of means including the Westpac Hawke's Bay Chamber of Commerce Business Awards.
The report said construction contributed $81 million to the region this quarter and retail sales experienced annual growth of 8 per cent to $393m.
Hastings Business Association general manager Susan McDade said although consumer confidence usually fell at the end of the second quarter, the general feeling was that confidence was building. "Winter sales have been quite strong."