A surge in business confidence in Rotorua is a big part of the Bay of Plenty again topping the country in the latest Westpac McDermott Miller Regional Economic Confidence Report.

Bay of Plenty topped the country in its economic confidence for the fourth consecutive quarter, according to March quarterly report.

Regional economic confidence slipped slightly, to a net 35 per cent of respondents feeling optimistic about the outlook.

Rotorua Chamber of Commerce chief executive Darrin Walsh said the confidence shown in the survey mirrored what was being seen in the streets. He said the confidence was largely driven by tourism, but most industries were feeling that confidence.


"Rotorua would be a very large contributor to the Bay numbers."

He said that in the past the Bay statistics were largely seen as Tauranga statistics and from a Rotorua perspective there was a bit of disengagement but now Rotorua was a key contributor to that positivity.

Westpac industry economist David Norman said: "Tourism is booming with guest nights approaching 3.5 million a year, huge growth in population is driving new dwelling construction activity, and the horticulture sector is enjoying a purple patch. Although the forestry outlook is not so good, the region is far less exposed to dairy, which is in dire straits."

Mr Norman said he expected much of the same for the rest of the year.

"From a regional perspective you're seeing a resurgence in the horticulture sector, strong population growth, migrants coming in but New Zealanders not leaving.

"You're seeing forestry, which is not particularly strong at the moment, but not as negatively affected by China as some other sectors," he said.

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"The one big worry for a Bay of Plenty person is if forestry does get hit hard."

Tauranga mayor Stuart Crosby said the result reflected the strong economy in Tauranga and the rest of the Bay but offered a word of caution.

"We have to support our growth with sustainable businesses that provide higher incomes. Tauranga is going to become a more expensive place to live because of the economy. It's going to require a lot of forward planning and commitment by many to retain the growth."

The Bay of Plenty's confidence score was closely followed by the Gisborne/Hawke's Bay region on 33.4 per cent - the only region where confidence increased during the quarter.