Confidence in Bay's economy down but Rotorua leaders upbeat

Rotorua Chamber of Commerce chief executive Allison Lawton says business confidence is high in Rotorua./File

Confidence in the Bay of Plenty economy has faltered but Rotorua leaders have been quick to claim business confidence is still high in the city.

It comes as Westpac releases its Regional Economic Confidence report for the March quarter.

For Bay of Plenty, a net 25 per cent of respondents expect the region's economy to strengthen over the next 12 months, down from a strong 50 per cent last quarter.

This quarter's reading is the lowest since September 2015, and has seen the Bay of Plenty fall back into the middle of the regional rankings, after dominating the top spot for the past 18 months.

"Bay of Plenty residents have become less optimistic about the region's economic prospects," Westpac acting chief economist Michael Gordon said.

"But with a number of positives still in play, including a strong horticulture sector, booming tourism, and strong population growth, sentiment remains firmly upbeat."

Rotorua Chamber of Commerce chief executive Allison Lawton said the drop in confidence surprised her.

"Based on the conversations I've had, there is still strong confidence in Rotorua.

"Tourism, timber, retail confidence... all indications suggest it's a really buoyant time... I find this report in contrast to what we are seeing on the ground."

Rotorua deputy mayor and Economic Growth portfolio leader Dave Donaldson said he had not felt a decline in economic confidence at a local level.

"I haven't heard any negativity about the local economy... one business has just made a $2 million investment into the Rotorua economy.

"There are international delegates heading our way who are excited about investment opportunities in our city... I certainly am not seeing what the report suggests."

Westpac economist Sarah Drought said Rotorua had a few strong performing indicators that would be increasing confidence in the area.

"The confidence in horticulture may not apply to Rotorua but definitely the strong tourism would be benefiting the city more than the wider region.

"Other factors include log prices sitting at high levels and the rise in house prices... the only thing that stood out as being not so positive was construction, with home building much stronger in Tauranga."

She said while Rotorua and Tauranga were the two areas dominating the report, the population size of Tauranga weighted the figures.

The retail sector was performing particularly well, according to Rotorua clothing designer and retailer Adrienne Whitewood.

"Last year we doubled our Christmas sales and there are new stores opening all around us."

There had also been an increase in job vacancies in Rotorua, Angelique Scott of Personnel Resources said.

"We've got a lot of roles at the moment, both temporary and permanent."

Many of the vacancies were in accountancy and human resources, Ms Scott said, but a variety of roles were advertised.

The number of candidates seeking new roles had also increased, but most of these were immigrants or Aucklanders keen to relocate, she said.

- Additional reporting by Angela Wood