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\nA new report has considered the level of employment, house prices, building consents, retail sales and consumer confidence in each region.
\nPhoto: RNZ\n<\/p>\n
Westpac report — most regional economies remain in a cold snap
\nOne region has mild performance — the best ever seen
\nAgricultural export regions doing better than cities
\nOn scale ranging frosty to hot — eight regions frosty or cold, two regions manage midpoint cool, one mild
\nSigns of recovery — businesses say not going backwards anymore<\/p>\n
The warmth of economic recovery is approaching, but most the country continues to shiver in an economic cold spell, according to a new report from Westpac bank.<\/p>\n
The bank’s latest look at regional economies has the best one — Otago — just above the mid point rating at “mild” on a scale between frosty and hot.<\/p>\n
Eight regions, including all the North Island and the top of the South Island, rated at the bottom of frosty and the second worst, cold.<\/p>\n
Senior economist Satish Ranchhod said most regions were still suffering from weak demand, with the retail and construction sectors doing it toughest, but there were signs of improvement.<\/p>\n
“While conditions remain challenging, businesses have told us that they aren’t going backwards like they did over the past year.”<\/p>\n
“In some parts of the country, we’re seeing early signs that those wintery conditions are starting to thaw, with several businesses reporting signs of a modest lift in demand, albeit from a low base.”<\/p>\n
The report was based on the level of employment<\/a>, house prices<\/a>, building consents, retail sales<\/a> and consumer confidence in each region.<\/p>\n Warm down south, cold up north<\/p>\n Ranchhod said Otago, including the tourism hotspot of Queenstown and a large rural hinterland, was the best performing region.<\/p>\n “Conditions in the region have been buoyed by both the firmness in the agricultural sector, as well as increases in international tourist spending.”<\/p>\n Canterbury and Southland were the next best regions, both supported by the rural sector.<\/p>\n “Rural regions, especially those in the south with large dairy sectors, are seeing firmer conditions than elsewhere,” Ranchhod said.<\/p>\n Better south than north<\/p>\n However, the North Island and particularly the big cities, Auckland and Wellington, were struggling.<\/p>\n “Ongoing pressure on household finances and related low levels of confidence are continuing to weigh on spending,” Ranchhod said<\/p>\n The jobs market remained soft with firms not shedding staff to the same extent, but also too cautious to hire.<\/p>\n Firms still faced cost pressures, particularly for insurance and rates, but not wages, and profit margins were not under the same pressure.<\/p>\n Ranchhod said lower interest rates were expected to gradually work their way through the economy and in time should start to spark improved consumer activity and broader economic activity.<\/p>\n