Economic confidence takes a hit due to issues in Taranaki/Manawatū-Whanganui region

The discovery of cattle disease M. Bovis in the southern Manawatu is one factor in a sharp drop in regional economic confidence.

A plunge in economic confidence for the region is primarily due to concerns affecting Taranaki and Manawatū.

The Westpac-McDermott Miller survey for the June 2018 quarter shows a net 11 per cent of households in the Taranaki/Manawatū-Whanganui region expect their economy to strengthen over the coming year. This is a sharp drop on the 23 per cent posted in March.

Westpac chief economist Dominick Stephens said confidence was likely to have been adversely affected by the Government's decision not to grant any more deep sea oil and gas exploration permits in the area.

"The possibility that New Plymouth's Yarrow stadium will be closed because it is an earthquake risk will also have dampened the mood," Stephens said.

"Reports that the M. Bovis cattle disease has been found in the southern Manawatu will also have not gone down well."

However, high dairy and crude oil prices will have given some cause for cheer, as will the rate of unemployment, which despite being above the national average, remains relatively stable, the survey report said.

The survey also examines consumers' views on their own economic situation, their current willingness to buy a major household item and the outlook for the national economy. The Westpac-McDermott Miller Consumer Confidence Index for the Taranaki/Manawatū-Whanganui region dropped from 106 in March to 103 in the June quarter.

"Households in the Taranaki/Manawatū-Whanganui region are feeling pessimistic about the economic outlook for the country as well as their own financial circumstances over the next 12 months," Stephens said.

"Despite this, an increasing number of households in the region think that now is a good time to purchase a major household item, although this could reflect an expectation of future price increases rather than a greater appetite to spend."