Economic confidence in Northland increases for 4th consecutive quarter

Prime Minister Jacinda Ardern was in Whangārei on June 1 to announce $46 million of funding for Northland. Photo / Michael Cunningham

Falling unemployment, rising house prices, elevated commodity prices and a large government spend-up in the region has seen Northlanders become increasingly confident about the prospects for the region.

A net 32 per cent of households in Northland expect their region's economy to strengthen over the coming year, according to the Westpac-McDermott Miller Regional Economic Confidence survey for the June 2018 quarter.

That is far better than the net 21 per cent recorded for the March quarter and represents the 4th consecutive quarter where confidence has risen in Northland. The survey was conducted between June 1-11.

Only Nelson/Marlborough (47 per cent), Bay of Plenty (45 per cent) and Wellington (39 per cent) had higher confidence ratings than Northland.

"Falling unemployment, rising house prices, and elevated commodity prices are likely to have contributed to an improved outlook [in Northland], while increased attention from government will have added to the air of positivity in the region," said Westpac Chief Economist Dominick Stephens.

"Some of this, however, will have been undone by the spread of the Mycoplasma bovis cattle disease to the region."

Early this month Prime Minister Jacinda Ardern arrived in Whangārei and unveiled a $46 million package of funding through the Provincial Growth Fund to boost Northland's economic and social development.

Much of the parcel from the Provincial Growth Fund would go on housing, cultural, tourism, forestry and roading developments, plus funding a think-tank that could get rail back on track in Northland.

The Westpac-McDermott Miller survey also examined consumers' views on their own economic situation, producing an index that summarises responses to questions including how respondents view their own financial situation, their current willingness to buy a major household item and the outlook for the national economy.

As a result the Westpac-McDermott Miller Consumer Confidence Index for Northland edged slightly higher to 110 in the June quarter, up from 109 in March.

"Northlanders are feeling less confident than they have been about the New Zealand economy, but seem reasonably confident of an improvement in their own financial circumstances over the next 12 months," said Stephens.

"This may explain why more households in the region think that now is a good time to buy a big ticket item."