Northland's economy second strongest in NZ

Booming tourism in the March quarter, which included two visits from Ovation of the Seas, is one of the factors behind Northland's rise in New Zealand's economic rankings. PHOTO / PETER DE GRAAF

Northland's tourism boom has the region "steaming" ahead of traditional powerhouses such as Auckland and the Bay of Plenty to be the second strongest economy in the country.

Northland's economy was the second strongest in the country in the first three months of this year. The ranking comes from ASB's Regional Economic Scoreboard, a quarterly league table of the nation's 16 regions based on measures such as employment, house prices, retail trade and construction.

Northland's economy was rated as "steaming" and kept from the top spot only by booming Nelson, which clung to its No 1 ranking from the previous quarter.

The report's authors said Northland was now "snapping at the heels" of Nelson with economic data that compared favourably, for the most part, with the national average. Northland's tourism boom - which is worth more than $1 billion a year - was one of the major factors behind the region's turnaround.

One area in which Northland lagged behind was business confidence but that wasn't affecting spending. Northland's growth rate for new car registrations and retail sales was stronger than anywhere else in the country.

Changes in the way employment figures were calculated made comparisons with last year difficult but it was clear Northland's labour market was improving, the authors said.

In the previous report, for the December 2016 quarter, Northland was a below-average ninth place.

Northland Inc chief executive David Wilson said the ranking confirmed the region was heading in the right direction. It backed up several recent positive reports including one by the Ministry of Business, Innovation and Employment picking Northland as a growth area for high-paying digital jobs.

The measures used in the report meant rankings tended to fluctuate but he took heart from retail spending figures which showed people were confident in the economy and their jobs, even if they said otherwise.

Some factors, such as rising house prices caused by Auckland's "halo effect", were taken as a positive in the report but were in fact a double-edged sword because it meant some locals were struggling to pay for housing.

Acting Far North Mayor Tania McInnes said the "fabulous" result was the result of hard work and dedication by many Northlanders.

There were several drivers but the key one was tourism, with a bumper year boosted by the Air New Zealand safety video - which has been viewed more than 10 million times on line - a marketing campaign in Melbourne and a surge in domestic visitors.

"Long term there's great potential for Northland if we're smart and work together," she said.

Tony Collins, head of the Northland Chamber of Commerce, hoped the report would give people confidence to invest in the region and expand their businesses.

Northland needed businesses with the confidence to create jobs, in particular for Far North youth.

The tourism boom was confirmed by Charles Parker, chairman of the Bay of Islands Marketing Group, who described it as "pretty spectacular". The strong March quarter was a continuation of four years of solid growth.

The latest scorecard comes amid a flurry of positive developments for Northland. Last weekend the Omapere-Rangihamama Trust at Kaikohe was named the best Maori farming operation in the country, with Prime Minister Bill English presenting the Ahuwhenua trophy at an awards night in Whangarei.

A week earlier the Northland District Health Board and Ngati Hine Health Trust started a multimillion-dollar redevelopment of the Kawakawa hospital site, while both Whangarei and Kawakawa have major Hundertwasser-related tourism projects waiting in the wings.

Northland is also starting to attract international investors, with Chinese firms planning a $750 million resort on Karikari Peninsula and offering to invest $1b in the Far North.

■ Northland's surge in the last quarter was outdone only by Manawatu-Whanganui, which shot up nine places from a lowly 13 to fourth. The full rankings, with the previous quarter's position in brackets, are: Nelson 1 (1), Northland 2 (9), Waikato 3 (3), Manawatu-Whanganui 4 (13), Tasman 5 (2), Gisborne 6 (4), Wellington 7 (10), Bay of Plenty 8 (8), West Coast 9 (5), Hawke's Bay 10 (6), Marlborough 11 (11), Otago 12 (7), Auckland 13 (12), Taranaki 14 (14), Southland 15 (16) and Canterbury 16 (15). The scoreboard is produced by ASB and the Main Report Group.