Northland confidence takes dive in last financial quarter

Northland has been found to be the most 'pessimistic' region following the last financial quarter, recent data shows. Photo /FILE'

Northland has come out on top as the country's most 'pessimistic' region according to data released from the last financial quarter.

The Westpac McDermott Miller Regional Economic Confidence survey results showed Northland's economic confidence had recently taken a snow dive, largely due to a return to the red light setting in December.

The survey of households conducted between December 1-12 showed Northland recorded a 29-point drop, taking confidence levels back to their lowest level since 2013.

A total of 1558 participants took part in the survey, which found regional economic confidence New Zealand-wide had dipped in the December quarter, most noticeable in regions that had, until recently, been relatively happy with their lot.

Westpac acting chief economist Michael Gordon said he suspected the results reflected the prospect of the Omicron variant spreading throughout the country and the risk to freedoms, both Northland and other regions, had become accustomed to.

"Northland was stuck in the red 'traffic light' setting over the quarter and moreover, the Covid-19 restrictions were particularly ill-timed given they coincided with the beginning of the region's tourist season," Gordon said.

"In addition, the dip in forestry returns over the second half of 2021 may have further dented confidence."

Kaitaia Business Association chairwoman Andrea Panther said she wasn't surprised by the results given Northland was cut off from Auckland longer than any other region during the last year's lockdown.

She said tourism and hospitality had been hit the hardest, with the flow-on effect impacting everyone.

"Before Christmas, we had extra border controls in place and Te Hiku had an extended lockdown period in November," Panther said.

Kaitaia Business Association chair, Andrea Panther. Photo / Myjanne Jensen.

"Businesses were afraid they were not going to get any visitors in the peak season which would normally have rescued many from going under.

"After all the forecasted modelling of how Northland was going to have out of control Covid-19 numbers, we actually had very little and luckily border controls were removed for an influx of visitors between Christmas and the early New Year.

"Despite the return of visitors, it wasn't enough to keep businesses going in some of the hospitality and tourism areas."

Trades services were another sector Panther said had struggled and continued to struggle as a result of the lockdown, largely due to supply chain issues.

She said in the three years she had chaired KBA, this was the worst economic position she had witnessed in her tenure.

"Having the red light restrictions longer than anyone else cut all events that usually attract people to our areas," Panther said.

"Going into orange for just three days meant our renewed hope was cut immediately once Omicron started.

"So many industries are suffering from all the new rules and some owners have their businesses for sale hoping to sell before losing everything. It's grim out there."

The Bay Business Breakfast Club echoed Panther's comments, reporting many local businesses had been battling to survive the past six months.

TBBBC representative Tegan Weber said being in varying level stages, with reduced tourism, a border between Northland and Auckland, plus strains on logistics, freight and supplies, had put immense pressure on local businesses.

"Businesses need support now more than ever, that's why we started The Bay Business Breakfast Club, to provide support and ensure our local business owners were not alone," Weber said.

"Our local eateries are running at reduced capacities, with many takeaways only due to the risk of not being able to accommodate customers.

"Many businesses are also struggling to find employees and some have closed their doors because the cost of adapting and changing their business to adhere to new rules was too high."

Bucking the trend, however, was Northland's meat and dairy sectors which, according to the survey, continued to perform strongly.

"There is a strong primary industry backbone in Northland which helped to keep the region running, as these businesses were not adversely affected by lockdowns," Weber said.

"It will be interesting to see figures coming through over the next quarter, as we deal with Omicron in our communities.

The Bay Business Breakfast Club representative and Harcourts BOI Strategic Partnership Manager, Tegan Weber. Photo / Supplied

"With the primary industry performing well and an increase in residential property prices of double digits on the year before, Northland is striving to return to a strong position."

With agriculture's prospects still strong, Gordon said he too expected the region's economic fortunes to turn at some stage over the coming year.

Overall the survey found confidence had slid in eight regions, while three regions bucked the trend and posted a lift in confidence.