Economic confidence for Whanganui improves on back of Government funding support

Government investment in the Whanganui-Castlecliff rail line has likely contributed to increased economic confidence in the region.

Confidence in the Whanganui-Manawatu and Taranaki regional economy has improved in the last quarter, with 23 per cent of households expecting it to strengthen in the coming year.

The Westpac-McDermott Miller Regional Economic Confidence survey for the March 2018 quarter says regional confidence is up from 17 per cent for the December quarter, with the Government's investment in Whanganui projects believed to be a contributor.

"Confidence in the region is likely to have improved on the back of slightly higher crude oil prices and more tourist arrivals, both of which will have supported spending," Westpac chief economist Dominick Stephens said.

"The announcement by the Government that it intends to use the Provincial Growth Fund to revitalise the Whanganui Port as well as upgrade the town's rail line is also likely to have gone down well."

Other positive factors were slightly higher crude oil prices and tourism growth, mostly from within New Zealand.

However, increased unemployment and drought conditions affecting dairy and meat production were likely to have undermined regional confidence.

The survey also asks how people view their own financial situation and their current willingness to buy a major household item. The Westpac-McDermott Miller Consumer Confidence Index for Taranaki and Manawatu-Whanganui was 106 in the March quarter, up from 102 in December. Despite this improvement, consumer confidence in the region remains the lowest in New Zealand.

"Households in the Taranaki and Manawatu-Whanganui regions are feeling a bit more optimistic about the economic outlook for the country and an increasing number are expecting some improvement in their financial circumstances over the 12 months," Mr Stephens said.

"As a result, more households in this region are showing a greater willingness to buy major household items."

The survey was conducted over the period March 1-15.