Consumer confidence in the Bay of Plenty is the highest in the country, according to a new survey.
However, experts say many Tauranga businesses were still stressed and confidence was "shaky" in level 2 while Rotorua's faith in the future had dropped as the city bore the brunt of MIQ facilities.
The Westpac McDermott Miller Consumer Confidence Index showed the region's consumer confidence jumped 4.5 points in September taking it to 107.9. An index number over 100 indicates that optimists outnumber pessimists.
Westpac's senior economist, Satish Ranchhod, said the Bay of Plenty was the most optimistic region in the country and that was not just because of the lower alert level.
"The region's growers and farmers continue to enjoy solid returns, and the related boost to incomes is flowing through to optimism among households.
"Spending in the Bay of Plenty has recovered quickly in recent weeks and the housing market is continuing to charge ahead."
Westpac's acting chief economist, Michael Gordon, said while the latest lockdown resulted in tough times for many families, most Kiwi households still expected their financial situation to improve in the coming year.
"That bodes well for the strength of economic demand when alert level settings are eventually dialled back."
He said there were some "big differences" in confidence levels across regions.
"Auckland posted a large fall, with alert level 4 restrictions remaining in place through the survey period.
"Unsurprisingly, tourist hotspots like Otago also saw confidence levels drop, as did Wellington and Canterbury.
"In contrast, confidence levels have actually increased in North Island regions like the Bay of Plenty and Manawatu-Whanganui.
"That may reflect that many of those regions have strong agricultural backbones."
Tauranga Chamber of Commerce chief executive Matt Cowley said the coastal Bay of Plenty was more resilient to the Government's Covid-19 restrictions than other regions because it was less reliant on international travellers and has a strong primary sector.
"For instance, we are nearing the end of another large kiwifruit packing and shipping season. We are also near full-employment."
Cowley said while economic output would be down this quarter, local confidence was typically higher this time of year in the hope for a prosperous festive season.
However, he said many business owners were still stressed as "business disruption could occur at any stage and the competition for skilled staff was pushing up personnel costs".
Rotorua Chamber of Commerce chief executive Bryce Heard said it was pleasing to see Bay confidence levels were high but "we have not seen evidence of that in Rotorua".
"Our perception is that a breakdown of the sub-regions would show that Rotorua is suffering from lower confidence."
Heard said member feedback was that the low confidence was due to Rotorua bearing the brunt of Covid MIQ facilities.
"Cities much larger than Rotorua are providing zero support, while Rotorua is providing support at higher levels per capita than anywhere else in New Zealand."
Retail NZ chief executive Greg Harford said trading at alert level 2 was challenging for retail and hospitality businesses.
"It's great news that consumer confidence is reported to be high in the Bay of Plenty, but feedback from retailers is that business confidence is still shaky.
"Across the country, including in the Bay, we are hearing that retail sales are down from where we would expect them to be and that some customers are nervous to get out and about.
"While there has been pressure on sales, the cost of business has also been increasing significantly, making businesses more marginal, and encouraging some to look to reduce costs, either by reducing trading hours or reducing headcount."
Market research director of McDermott Miller Limited Imogen Rendall said while lockdown dented New Zealand's confidence the impact was not as great as this time last year.
"Perhaps the knowledge that New Zealanders have got through tough times before has helped consumers remain broadly, albeit cautiously, optimistic about their own and New Zealand's economic future."
Rendall said younger people aged 18 to 29 seemed unaffected by the events of the past few weeks with confidence remaining high at 111.5 - a small increase of 1.2 points since last quarter.
In contrast, people aged 30 to 49 have seen the biggest drop of 9.8 points down to 101.9.
"Perhaps the realities of juggling jobs, homeschooling and caring for those at risk or shielding, together with increasing concerns about the immediate economic future of the country have had an impact."
People in the 50-plus age bracket experienced a smaller drop in confidence of 2.8 points, but overall remained the most pessimistic across the different age groups "with concerns about their immediate future and caution about the long-term economic prospects of New Zealand".
The survey was conducted over September 1 to 11 with a sample size of 1557.
The margin of error of the survey is 2.5 per cent.
Consumer confidence by region
September 2021: 103.2
June 2021: 101
September 2021: 101.4
June 2021: 108.6
September 2021: 105.8
June 2021 : 105.2
Bay of Plenty
September 2021: 107.9
June 2021: 103.4
September 2021: 101.5
June 2021: 102.6
September 2021: 103
June 2021: 98.3
September 2021: 106.7
June 2021: 113.1
September 2021: 98.8
June 2021 : 109.3
September 2021: 103.2
June 2021 : 109.5
September 2021: 94.3
June 2021: 104.6
September 2021: 97.8
June 2021 : 110.1
September 2021: 102.7
June 2021 : 107.1
Source: Westpac McDermott Miller Consumer Confidence Index