Economic confidence has rebounded in Northland along with employment, according to a new report.

Westpac's Regional Roundup said regional economic confidence and regional employment confidence both rebounded sharply in the September quarter.

The latest unemployment figures suggested a decline in the longer-term unemployment rate, which would be welcome in a region that had long experienced elevated unemployment, it said.

Northland's unemployment rate was 7.1 per cent for the quarter, down on the previous quarter's 11 per cent and the five-year average of 8.2 per cent.


Other indicators were also positive. Passenger and commercial vehicle registrations were up 40 per cent on their five-year averages.

Tourism was also beginning to take off, according to the report.

The September quarter was particularly strong, with 518,000 guest nights, up 17 per cent on the same quarter last year and 23 per cent on the five-year average.

"Northland is expected to continue to enjoy a period of solid growth. Dairy's recovery will assist, plus there is renewed strength in forestry, with prices remaining solid."

The outlook for meat and wool was more mixed, but not as weak as it had been in the past.

"Add to this the surge in population growth, and the uptick in building consents, and we expect to see a lot more building activity.

"And all the extra people moving to the region implies more demand for retail goods and services, and vehicles."

Northland's unemployment rate was expected to slowly lower on the back of the improved outlook.

"Tourism may also grow further although the region has been somewhat hampered by difficulty of access."

Parts of Northland were easily accessible from Auckland, but flights to the region were few and far between and direct flights were largely unavailable from other parts of New Zealand, the roundup said.

Northland Chamber of Commerce chief executive Tony Collins said business confidence was strong, the fiscal environment was stable and interest rates were good.

The drop in unemployment was also positive with businesses becoming confident to invest in employing people, he said.

"We've started from a much higher baseline than the rest of the country and obviously, comparatively, we're still high but at least we're tracking in the right direction."

Mr Collins said population growth was also strong, partly as a result of challenges in Auckland.

Northland now had good infrastructure, realistic land prices, and offered a good quality of life.

He said there would always be concerns around forestry and farming in the region, though dairy was improving slowly.

Mr Collins said the tourism sector was doing particularly well and Northland might get some spin-off from the uncertainty around tourism in Kaikoura and the upper South Island.

Construction would perform strongly in the coming year too and residential demand would play a big part in that.

Westpac's Regional Roundup said nationwide, business confidence and hiring were on the rise and the pipeline of construction work was strong.

Migration, as a major driver of population and GDP growth, remained remarkably strong. Half of that migration growth was due to a reduction in New Zealanders leaving.

The outlook for the country overall was a lot more positive on the back of a happier dairy sector.

Other commodities, such as horticulture, wine and forestry were recording strong export growth.