“Growth is not at the levels we’ve seen historically, but the region continues to outperform many parts of the country due to the strength of our key industries, the resilience of local businesses, and continued confidence in the Western Bay as a place to invest, work and live.”
Priority One Chief Executive Dave Courtney. Photo / Supplied
Courtney said export industries – particularly kiwifruit and the Port of Tauranga – remained key drivers of the regional economy while domestic conditions were under pressure.
“Our export-facing sector, particularly kiwifruit and the port and associated logistics providers, is a key driver of the economy.”
He said ongoing investment linked to strong population growth forecasts was also supporting construction and infrastructure activity.
Courtney said while job growth had slowed alongside the national economy, the long-term outlook remained positive, supported by the region’s export base and the Western Bay of Plenty regional deal.
Despite the strong headline result, economists and business leaders say risks are building.
ASB warned “storm clouds are looming”, with inflation pressures and global uncertainty – including the ongoing impacts of conflict in the Middle East – expected to weigh on growth and confidence.
“There is no doubt the second half of 2026 will be a continuation of the economic challenges that have gained momentum since the Middle East conflict began in February,” Courtney said.
“Rising costs, disrupted supply chains, falling consumer and business confidence – we know businesses are aware of, and planning for, these factors.”
In a media release, ASB chief economist Nick Tuffley said a bumper kiwifruit season and solid employment gains had helped the Bay of Plenty reclaim the top spot.
“Strong export demand and solid employment growth are underpinning the region’s momentum,” Tuffley said.
However, business sentiment on the ground is more mixed.
Tauranga Business Chamber chief executive Matt Cowley said that although the horticulture sector remained a bright spot, rising costs were weighing on confidence.
“The strong horticulture export season, particularly kiwifruit, is a great news story for all of New Zealand.
“Overall, it’s a mixed bag in recent months as rising fuel prices have put pressure on business and consumer confidence.”
Tauranga Business Chamber chief executive Matt Cowley. Photo / Mead Norton
Cowley said publicly funded construction projects and a return in population growth were helping to support business pipelines, particularly in the building sector.
But he warned many businesses were still under pressure.
“Even if revenue is steady for some businesses, the rapid rise in costs has put pressure on cash flow and profits,” he said.
Labour market conditions were also evolving, with Cowley saying some roles had become easier to fill but challenges remained around reliability and workforce readiness.
“The key challenge is finding work-ready staff who can consistently turn up.”
Rotorua Business Chamber chief executive Melanie Short addresses the Westpac Smarts Business Luncheon on Friday as new Business Pulse survey results are released.
Rotorua Business Chamber chief executive Melanie Short said the ASB data may not yet reflect the full impact of global tensions.
“My view is that the ASB data timeframe is prior to the Middle East conflict so the picture is skewed.
“Our data is also mid-conflict, so the next round will be the true picture. We were certainly feeling positive at the end of 2025 and start of 2026 and hope to return to that level of confidence in the coming months.”
Rotorua NZ was also approached for comment.