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Southland is the only region of the country where the economic temperature is hot, with 10 other regions considered cool, cold or mild, according to the Westpac Regional Roundup for April by the bank’s economics team.
Economic conditions in the south remain positive, underpinned by the strength of commodity export earnings.
“Hopefully that will provide those regions with some insulation from the powerful global headwinds now buffeting the economy,” Westpac senior economist Satish Ranchhod said.
“Firmness in international tourism arrivals has also been a boon, but there is concern about how resilient those numbers will be given rising cost pressures.
“Prior to the Middle East conflict we were seeing signs of a firming in economic activity.
However, much of that momentum has now been derailed.
“The past month has seen a stark rise in cost pressures and uncertainty.
“The impacts of those developments are extending well beyond transport costs, resulting in softer demand, concerns about supply security and increased economic uncertainty.”
Ranchhod said some big factors are still supporting economic activity, including last year’s interest rate cuts.
Firmness in export commodity prices is continuing to boost incomes and spending in many rural regions.
“However, with significant disruptions stemming from the Middle East conflict, economic growth is now likely to remain soggy over the coming months, as will the demand for staff.”