Confidence in the Bay of Plenty region's economy has fallen sharply, despite favourable kiwifruit and forestry conditions and a strong labour market, according to a new survey.
The Westpac-McDermott Miller Regional Economic Confidence survey for the June quarter reveals only 19 per cent of households expected the region's fortunes to improve over the next 12 months.
Westpac Chief Economist Dominick Stephens said this was a massive drop from the 49 per cent from the March quarter.
"This is a surprising result considering that economic activity in the region has been running hot," Stephens said.
"The region continues to benefit from favourable conditions for kiwifruit and forestry, still firm construction activity, and a strong labour market."
"That said, there are signs that momentum could be slowing, House prices, for example, have slowed markedly in recent months and this is likely to be weighing heavily on households in the region," he said.
Stephens said the Bay of Plenty, Gisborne/Hawkes Bay, Wellington and Southland had enjoyed an extended run of strong economic growth, but may now be showing signs of weakness.
"The only exception was Otago, where confidence is very high and lifted this quarter."
"Despite a deterioration, households in regions with a large rural backbone continue to be more confident about the future than their metropolitan counterparts, he said
The survey was conducted from June 1 to June 10.
Household economic confidence ranked by region
(June 2019 quarter compared to March 2019 quarter):
Otago: 45 %, up by 5%
Nelson/Marlborough/West Coast: 30%, up by 5%
Waikato: 29%, down by 5%
Southland: 27%, down by 9%
Gisborne/Hawkes Bay: 26%, down by 21%.
Taranaki/Manawatu-Whanganui: 19%, up by 9%
Bay of Plenty: 19%, down by 30%
Canterbury: 15%, down by 3%
Northland: 9%, down by 11%
Auckland: 3%, up by 13%
Source: Westpac-McDermott Miller Regional Economic Confidence Survey