Manawatu-Whanganui economy riding high on exports - economist

Forestry exports are boosting returns to the region. Photo / File/ Bevan Conley

The economies of New Zealand's 16 regions are outstripping those of major cities - with Manawatū-Whanganui one of the more buoyant.

House prices here and in Hawke's Bay had the biggest rise in the country last year - 11 per cent. In Auckland house prices rose only 1.3 per cent.

The Manawatū-Whanganui economy grew 3.8 per cent in the 12 months to September, Infometrics economist Brad Olsen said. The Gisborne region had the highest growth in New Zealand - 4.3 per cent - while Auckland and Wellington only grew 2.6 per cent and the national average was 2.9 per cent.

New Zealand's regions are "export powerhouses", Olsen said, especially for agricultural products. In 2018 some were at near record prices - which are expected to continue.

Lamb and mutton prices were up 22 and 31 per cent respectively on the previous year. Forestry was up 15 per cent on the previous year.

Dairy has been a poor performer, Olsen said, with prices declining through 2018. They were better toward the end of the year, but higher production this season is expected to dampen that.

Other export prices are expected to stay high - unless a slowdown in the Chinese and South Asian economies continues or worsens, and reduces demand.

Households in this region had a positive economic outlook, and spending was up 6.5 per cent - higher than the New Zealand average of 4.8 per cent. Tourism spending grew 7.2 per cent in our region.

The high demand for houses here has been part of the "halo effect" from people leaving Auckland, Olsen said. Demand is expected to drop by the end of next year, under the influence of slowing population growth and more regulation of investors.

The population of the Manawatū-Whanganui Region grew by 3400 people in the year to June 2018. A quarter of that was natural increase, with the remaining 2500 people moving here - either from overseas or from other parts of New Zealand.

That's a 1.4 per cent increase, lower than the national average of 1.9 per cent.

Unemployment here dropped from 6 per cent to 5.6 per cent, but was still higher than the national average of 4.3 per cent.