Regional Trends
February 2009
The best in the East and the West
Quarterly percentage change
Ten of the fourteen regions recorded a rise in economic activity in the final
three months of last year. The West Coast recorded the largest increase in
economic activity (up 2.0 percent), reversing a large fall in the preceding
quarter (-2.6 percent). Gisborne recorded the second largest gain in activity
and is also noteworthy for being the only economy to post three consecutive
rises in economic activity. Northland and Taranaki recorded back-to-back
declines in economic activity.
All of the South Island regions recorded a rise in economic activity in the
December quarter. In aggregate the South Island posted a 0.9 percent rise in
economic activity. By comparison, the North Island, recorded a 0.3 percent
decrease in activity. Our nationwide measure of economic activity posted a 0.1
percent drop in economic activity – the fourth consecutive quarterly decline in
the series.
Some of the inter-regional volatility from quarter to quarter will reflect
statistical noise. But its also consistent with the general economic picture
being “patchy”.
Year-on-year growth
Not only did the two regional economies with the smallest economic value (West
Coast and Gisborne) record the largest quarterly rise in economic activity, they
also recorded the highest annual average rates of economic growth. At the other
end of the spectrum, the top half of the North Island (which generates about
half of all economic activity in NZ) has recorded the largest decline in
economic growth.
On an inter-Island basis, the South Island recorded a 0.4 percent rise in
economic growth over the 2008 calendar year, while the North Island posted a 1.0
percent fall. The nationwide measure eased 0.7 percent over the year – the first
negative rate of annual economic growth since 1991.
December quarter at a glance
- Retail interest rates dropped in line with the
large cuts to the Official Cash Rate (OCR).
- The exchange rate eased against all our major
trading partners, except the Great Britain pound.
- Commodity prices were in decline in the final three
months of last year.
- Business confidence deteriorated in every region,
as the true magnitude of the global slowdown came to bear.
- Consumer confidence retraced in most regions as
households brace for the expectation of tougher times ahead.
- Retail sales edged lower in nearly all regions.
Nelson-Marlborough recorded the largest fall, while Waikato and Gisborne
recorded modest increases.
- House sales eased in every region, except the West
Coast. The largest fall was recorded in Northland.
- Dwelling approvals dropped in nearly every region,
led by a large fall in Wellington.
- Commercial building permits eased slightly.
Northland recorded the largest fall, while Gisborne posted the largest increase.
- Employment recorded an unexpected lift in December.
Otago registered the largest increase; and Taranaki the greatest fall.
- The unemployment rate rose in most regions.
Northland recorded the largest increase, to top the nationwide table at 8.5
percent (seasonally adjusted).
Northland
Northland recorded the second largest rise in accommodation guest nights (up 9.9
percent) in the three months to December. The number of sections sold in the
region increased 10 percent from the September quarter. Houses sales in the
region dropped 15 percent over the same period; and the median number of days to
sell a house hit a six-year high of 70 days (contrasting a shortening
nationwide, to 49 days). Northland recorded large falls in both residential and
commercial building permits. Residential dwelling approvals fell 26 percent (the
second largest decrease in the nation) and commercial construction consents
slumped 20 percent (the largest fall in NZ). Employment in the region dropped
2.7 percent, propelling Northland’s unemployment rate to a six-year high of 8.5
percent.
Auckland
A majority of Auckland’s real estate statistics improved in December. Rural real
estate sales increased 5.6 percent, contrasting a 24 percent fall nationwide,
while the number of homes sold eased only 1.4 percent – a modest dip compared to
a 5.0 percent drop for the nation as a whole. For the first time in over a year,
both business and consumer confidence in Auckland were above their respective
nationwide benchmarks. The number of people unemployed in Auckland hit a
ten-year high, pushing the region’s unemployment rate up to 5.4 percent, from
4.5 percent in the preceding quarter. Retail sales in Auckland fell 6.7 percent,
representing the second largest fall across the regions.
Waikato
Waikato’s real estate market perked up a tad in the three months to December. The
region recorded the largest rise in house sales (up 1.9 percent) contrasting a
5.0 percent decline nationally; and the median number of days to sell a house
shortened from 67 to 56 days. However, the number of building consents issued in
the region dropped for both residential and commercial permits. Residential
dwelling approvals slipped 11 percent (-9 percent nationally), while commercial
consents dropped 6 percent (down 1 percent nationally). After a blip in
September, the number of people employed in Waikato reverted back to the same
level where it was six months earlier. Consumer confidence also retraced after a
short lift in the preceding quarter.
Bay of Plenty
After playing second fiddle for the past two quarters, consumer confidence in the
Bay of Plenty elbowed its way up to the top rung in December. Supporting this
high level of optimism among households was a large rise in the number of people
employed, which increased 4.3 percent in the quarter – lifting the series to its
highest level in 18 months. The Bay recorded a strong rise in the number of
commercial construction consents issued, up 15 percent and contrasting a 1
percent fall nationwide. Residential building permits eased (down 5.7 percent)
but the drop was less than the countrywide fall (-9.3 percent). However, house
sales fell 12 percent, more than twice the 5 percent fall measured nationally.
Gisborne
Gisborne recorded the largest rise in accommodation guest nights in December, up
16 percent from September. The number of houses sold in the region made a modest
increase (up 1.0 percent), contrasting a 5.0 percent decline nationally. Rural
real estate sales showed a large rise, lifting 15 percent in the three months to
December, at a time when the nationwide figure fell 24 percent. The number of
commercial building permits issued in Gisborne surged 41 percent, but the number
of residential dwelling approvals fell 14 percent. Employment dropped 1.4
percent, pushing the unemployment rate up to a three-year high of 7.4 percent.
Hawke’s Bay
Hawke’s Bay recorded a weaker issuance of building permits in the December
quarter. Commercial building permits fell 20 percent and residential dwelling
approvals dropped 23 percent. This compared with nationwide declines of 1.1 and
9.3 percent, respectively. Employment fell 1.6 percent in the region, which was
the third largest decline across the regions and lifted the region’s
unemployment rate up to a seven-year high of 5.9 percent. The number of house
sales in the December quarter was 20 percent lower than the preceding three
months. At the other end of the spectrum, Hawke’s Bay recorded strong gains in
new car registrations (up 28 percent) and accommodation guest nights (up 6.8
percent).
Taranaki
Taranaki recorded the largest decrease in employment in the December quarter,
falling 5.3 percent to a 2½-year low. Consequently, the region’s unemployment
rate rose to 4.0 percent – the highest rate since June 2007. The number of house
sales dropped 10 percent in the December quarter, twice the 5 percent decline
recorded nationally. Rural real estate sales dropped 31 percent from three
months earlier, eclipsing the 24 percent decline measured nationally. The number
of accommodation guest nights slipped 1.2 percent in the three months to
December, in parallel with the region’s accommodation occupancy rate slipping
5.0 percent over the quarter. The number of new car registrations rose by a
third from the September figure and commercial registrations increased 41
percent.
Manawatu-Wanganui
Conditions in Manawatu-Wanganui’s labour market improved in the December quarter,
as employment rose 2.3 percent and the region’s unemployment rate fell to a
four-year low. House sales dipped 2.0 percent but this outperformed the 5.0
percent drop recorded nationally. Rural real estate sales, however,
underperformed the national average – dropping 33 percent (compared to a 24
percent decline nationwide). Consumer confidence was marginally above the
national benchmark, but business confidence fell short of the nationwide figure.
In summary there was a small rise in economic activity recorded in
Manawatu-Wanganui in the December quarter, which offset the small dip in
activity in the preceding quarter. Overall the level of economic activity in
December was identical to the level measured six months earlier.
Wellington
Wellington recorded the largest decrease in the number of residential building
approvals issued in the December quarter, falling 30 percent from the September
quarter. Consents for commercial construction were also weaker, dropping 7.1
percent and exceeding the 1.1 percent decline nationally. The number of house
sales dropped 13 percent from September (down 5 percent nationwide) and
employment fell 1.3 percent (contrasting a 0.9 percent rise nationally). Despite
these falls, consumer confidence remained above the nationwide benchmark,
although it did slip down the rankings – from the top rung in September, to
seventh position in December. Accommodation guest nights rose 4.8 percent (-0.2
nationally) and retail sales slipped marginally – down 0.1 percent (compared to
a 0.6 percent drop nationally).
Nelson-Marlborough
Nelson-Marlborough recorded the largest rise in the number of residential
building permits issued in the December quarter, up 17 percent from September
and contrasting a 9 percent decline nationally. The number of consents issued
for commercial construction work increased 5.8 percent, outstripping a 1.1
percent drop nationally. Employment in the region grew 2.9 percent, to hit a new
record high. Consumer confidence was the joint second highest across the regions
– representing the region’s highest relative ranking since March 2000. Business
sentiment continues to trail the nationwide benchmark. Nelson-Marlborough
recorded the largest falls in both retail sales (down 2.7 percent) and house
sales (down 20 percent).
West Coast
The West Coast recorded rises in both residential and commercial building
permits. Residential dwelling approvals rose 0.5 percent in the December quarter
(-9.3 percent nationally) and commercial consents lifted 9.9 percent (-1.1
percent nationally). New car and commercial motor vehicle registrations both
rebounded strongly in the December quarter, following large falls in the
preceding quarter. Retail sales made a modest rise (up 0.6 percent in the
quarter) despite the West Coast recording the largest decline (down 4.5 percent)
in electronic payment data. The number of rural real estate sales sold in the
December quarter slowed to a nine-year low. The number of house sales also
eased, dropping 14 percent from the preceding quarter.
Canterbury
Canterbury recorded the largest rise in retail sales in the December quarter,
rising 2.2 percent, in contrast to the 0.6 percent nationwide decline.
Commercial building consents issued rose 5.6 percent, when the nationwide figure
slipped 1.1 percent. Dwelling approvals issued in the region eased 0.8 percent,
but this compared favourably with a 9.3 percent drop nationwide. Business
confidence (while negative) was the highest across the regions, but consumer
confidence sat at the other extreme and was the lowest across the nation. Rural
real estate sales fell sharply in December with large farm sales down 44 percent
and sales of lifestyle blocks dropping 28 percent from the preceding three
months. Accommodation guest nights retraced 3 percent and the region’s
accommodation occupancy rate slipped to an eight-year low.
Otago
Despite employment rising strongly, Otago’s unemployment rate nudged up from 3.0
percent in September, to 3.1 percent in December. The number of large farms sold
in Otago was stable, at a time when the national figure fell 37 percent. Sales
of sections rebounded 55 percent rise, but house sales followed the nationwide
lead – slipping 8 percent from the previous quarter. For the first time in five
years, both business and consumer confidence indices in Otago were above the
respective nationwide benchmarks. Otago recorded the largest drop in
accommodation guest nights, falling 5.0 percent from September. The number of
commercial building consents was weaker, falling 9.0 percent in the final three
months of 2008 (-1.1 percent nationally).
Southland
Southland recorded the second strongest gains in both residential and commercial
building permits issued in the December quarter. Residential dwelling approvals
rose 0.5 percent (down 9.3 percent nationally) and commercial construction
consents lifted 18 percent (down 1.1 percent nationwide). Business confidence
dropped to the lowest level across the regions – the last time Southland had a
stint at the bottom of the rankings was in mid-2006. Mirroring the weaker
sentiment were large falls in rural real estate sales (down 55 percent) and new
tractor registrations (down 16 percent). Employment dropped 1.4 percent in the
region, pushing Southland’s unemployment rate up to a three-year high of 3.1
percent. Sales in the region’s residential real estate market slowed 8 percent
but the median time to sell a property shortened (by 10 days) to 40 days.
The tables can be viewed as charts on our
Regional Trends charts page.
Back to top