Hawke's Bay remains in the bottom half of economic rankings but consumers are bucking the trend with a 5 per cent increase in retail trade.

ASB's Regional Economic Scoreboard for the March 2014 quarter gave the region a two-star rating out of a possible five. Despite a strong forestry sector and strengthening meat sector, the region's economy remained in the bottom half of the rankings, the report said.

However, retail trade saw annual growth of 5 per cent ($373 million) up from -6 per cent ($354 million) in the March 2013 quarter.

Hawke's Bay Chamber of Commerce CEO Wayne Walford said the growth indicated a rise in consumer confidence.


"Over the last six or so years I've been with the Chamber of Commerce, when confidence goes up, people start buying low-level luxuries - going to the hairdresser, going out for dinner - those for me are good signs of growth."

The 1.5 per cent annual growth in house prices was also a positive development. The average house price was $340,000, up from $319,000 in the March 2013 quarter. "Hawke's Bay housing is a huge marketing opportunity for the rest of New Zealand."

Napier Labour candidate Stuart Nash said retail sales growth was an indication of increased tourism, which couldn't be relied on year-round. "They're summer figures ... we can't depend on tourism to deliver growth.

"The local solution is groups like the Chamber of Commerce being more proactive in bringing new businesses to Hawke's Bay.

"Another quarter like this sees more and more skilled people up and leave and people aren't looking at Hawke's Bay as a place to relocate."

Tukituki MP and Commerce Minister Craig Foss said the region had traditionally been in the lower area of "all these types of statistics".

"We're still dealing with the downstream of the drought, which whacked our confidence and probably put us a year behind the rest of the country."

However, the retail spike was encouraging, Mr Foss said. "In the Bay in particular, confidence is rising; discretionary spending is increasing and there is evidence of growing confidence."


Mr Foss said large-scale projects under way in the region, such as two new wineries, were evidence of investment in the Bay's future.

To remedy decreasing employment, the Bay needed to seize opportunities to grow tourism and jobs - for example, checking the feasibility of the Sunrise Rail Trail.

Napier MP Chris Tremain said initiatives like the Ruataniwha dam scheme, oil and gas exploration and amalgamation were fundamentally critical to growing the economy "but every part of the journey for these initiatives is difficult.

"We're opposed - often by the same people saying they want more jobs and new growth.

"Overall New Zealand has grown strong and it's difficult to see Hawke's Bay in the lower half."

Mr Tremain said increased retail trade was more a factor of the wider economy.

Annual population growth of 0.0 per cent was reflective of a significant turnaround in migration. The region's population was unchanged from the March 2013 quarter; sitting on 155,000.

"What we're not seeing is strong population growth in Hawke's Bay," Mr Tremain said.

The report contained no figures relating to employment for the Hawke's Bay region.