South Island confidence bounces back - ASB Regional Economic Scoreboard

Canterbury finished near the top of the country for annual growth in house sales, employment, retail sales and consumer confidence. Photo / Mark Mitchell

The West Coast and Canterbury are the most improved performers in the latest ASB Regional Economic Scorecard.

The Scoreboard ranks the regions based on year-on-year growth across a range of measures including employment, retail sales and building consents.

The latest report captures pre-lockdown performance, comparing the three months to July 2021 with the same quarter last year.

It showed significant movement after several stable quarters, reflecting the relative bounce-back of the country's 16 regions from the depths of last year's level 4 lockdown, said ASB chief economist Nick Tuffley.

The West Coast was the champion for the quarter, jumping 10 places to the top of the table – the first time in almost three years that a southern region has taken top spot.

The results show some big year-on-year swings, and we are likely to see a similar dynamic play out again following the step up in alert levels over the past five weeks, Tuffley said.

"After a significant divide between the prosperity of the North and South Island, largely driven by the prolonged impact of the border closure on areas such as Queenstown and Central Otago, it's nice to see some of the Southern regions pull ahead this quarter, with West Coast and Canterbury bouncing back well from last year's major lockdown."

Tuffley said he expected to see this continue next quarter, as the South had been less affected by the latest lockdown than Auckland.

The West Coast performed well across all measures, with an impressive 170 per cent lift in building consents, and an 88.5 per cent lift in new car sales year-on-year.

"It's not uncommon to see smaller regions like West Coast jump around quite a bit, given even small moves in the underlying data can produce big swings. The Coast was also coming off a low base on many metrics, scoring quite low during the height of lockdown 2020," Tuffley said.

It was also a strong quarter for neighbouring Canterbury, with the region finishing near the top of the country for annual growth in house sales, employment, retail sales and consumer confidence, pushing it into second position in the scoreboard.

This came after five or six years of moderate performance as the post-earthquake boom abated, said Tuffley.

In the North Island, previously second- and third-ranked regions Hawke's Bay and Manawatū-Whanganui fell 10 and 11 places respectively, ending Hawke's Bay's golden run of almost three years in the top five on the Scoreboard.

The Auckland region had remained strong in the second quarter - up four places as construction continued to drive growth.

It would "undoubtedly take a tumble" in the September quarter, Tuffley said.

"While Auckland remains at level 3, activity worth around 0.1 per cent of annual GDP is foregone every week, although that is an improvement on the 0.3 per cent foregone each week while Auckland sat at level 4."

However, he was confident that we will see activity recover substantially over the December quarter once restrictions ease further

Bay of Plenty also saw strong growth in the quarter, up two places in the rankings to third on the list.