Bay economy beats NZ rate

Strong prices for beef, wool and horticultural produce is underpinning Hawke's Bay economic growth. Photo / Paul Taylor

Hawke's Bay had its strongest quarterly rise in almost a decade, according to the ANZ Regional Trends report to December.

The report's measure of composite economic activity recorded growth of 1.9 per cent for the region, above the national rate of 1.8 per cent which was the largest national quarterly increase in 12 years.

Year-on-year regional growth was 3.8 per cent, again above the national growth of 3.3 per cent.

It said business and consumer confidence was greater than nationwide increases but gains in the transport sector and retail sales were milder.

The number of house sales rose in the quarter with rural volumes outpacing the national figure.

Regional exports fell but were up 7 per cent for the year.

"Guest nights look to have plateaued at historically high levels, with occupancy rates in the region well above historical averages."

The ASB/Main Report Regional Economic Scoreboard for the same quarter described the Hawke's Bay housing market "hot", with a 37 per cent annual growth in house sales and residential building consents up 20 per cent.

"No doubt there is some flow-on from the Auckland market but there are also good prices for local beef, wool and horticultural produce," the report said.

Despite the regional strengths it awarded the region three out of five stars.

"It seems demand is not the challenge at present, but rather local capacity, preferences and practices.

"Employment in the combined Hawke's Bay-Gisborne area did not increase," the report said.

"The unemployment rate did decline but that's because more people opted out of the workforce.

"Meanwhile questions are being raised as to whether there will be enough pickers for the bigger harvest this summer/autumn."

Looking forward the Regional Trends report said good business confidence pointed to a strengthening in growth "and the labour market looks to be turning given strengthening internet job ads.

New Zealand posted an unexpected trade surplus in January, aided by greater exports of wood, dairy and fruit.