Regional Trends
November 2010
A close shave
Quarterly percentage change
Eight regions recorded a rise in economic activity in the three months to September,
while five regions recorded a decline.
The two smallest regional economies (West Coast and Gisborne) recorded the largest
increases in economic activity, lifting 1.2 and 1.0 percent, respectively. Taranaki
recorded the largest decline in economic activity, joined by the heavyweight regional
economies of Canterbury, Otago and Wellington.
Our nationwide measure of economic activity eased 0.2 percent, following five quarters
of increases. The decline in activity was more pronounced in the South Island, with
a 0.6 percent retracement from three months earlier. In comparison, the North Island
recorded a modest 0.2 percent rise in economic activity in the September quarter.
Year-on-year growth
Year-on-year economic growth lifted to a 2½-year high of 2.3 percent in September.
The North Island recorded the strongest rise, expanding 2.6 percent in the twelve
months to September, while the South Island economy recorded only a 1.6 percent
rise in economic growth.
Three regions (Auckland, Gisborne and Otago) shared the strongest annual rate of
economic growth, at 2.1 percent. At the other end of the spectrum, Southland has
the lowest (and only negative) year-on-year rate of change (-0.3 percent).
The Bay of Plenty recorded the strongest rate of annual economic growth in September,
lifting 3.5 percent from a year earlier. Northland was a close second, expanding
3.4 percent, with Otago third fastest on 3.2 percent growth. Nelson-Marlborough
and Southland were laggards across the regional mix, only expanding by 0.5 and 0.6
percent, respectively.
September quarter at a glance
- Retail interest rates increased for maturities less
than a year and dropped for longer-dated maturities.
- The exchange rate appreciated against the US dollar
but depreciated against all our other major trading partners.
- Commodity prices were slightly weaker in the September
quarter in both world terms and local prices.
- Business confidence weakened across all regions. Nelson-Marlborough
reported the lowest level of confidence, while Canterbury recorded the highest level
of sentiment.
- Consumer confidence eased over most regions. Canterbury
was the most optimistic and Nelson/West Coast the least optimistic.
- Retail sales increased in most areas, led by a rise
in Gisborne.
- House sales were lower than the June quarter in all
but two regions. Northland recorded the largest fall, while the West Coast and Southland
reported a rise.
- Dwelling approvals were generally weaker. The Bay of
Plenty recorded the largest quarterly rise and Canterbury the largest decrease.
- Commercial building permits edged up at a nationwide
level. The West Coast recoded the largest increase and Taranaki reported the largest
drop.
- Employment grew over most regions, with Waikato recording
the largest increase.
- New motor vehicle registrations were weaker across
all three categories (private, commercial and tractor registrations).
Northland
Northland recorded the largest fall in house sales in the three months to September.
The number of sales dropped 19 percent to a seasonally adjusted 271, which represents
a fresh low for the region. The number of sections sold fell 39 percent in the same
period, dropping to a two-year low. Farm sales fell to their lowest level since
the start of our series in 1997. However, the average selling price for rural land
has improved to a 12-month high, underpinned by a lift in the average value of lifestyle
block sales. The rise in retail trade and Paymark electronic sales were both the
fourth strongest across the regions.
Auckland
Consumer confidence in the city of sails eased to its lowest level since June 2009,
relegating Auckland to the second most optimistic region, behind Canterbury. Furthermore,
business confidence also slipped to its lowest level since June 2009, with Auckland
having the fourth highest level of business sentiment for the second consecutive
quarter. The region posted the second strongest increase (12 percent) in the number
of commercial building permits issued, taking the series up to its highest level
since December 2008. Overall, Auckland’s economy expanded 0.5 percent in the September
quarter, with year-on-year growth hitting a five-year high.
Waikato
Waikato recorded the nation’s strongest rise in employment over the September quarter,
lifting the series to its highest level since December 2009. However, the number
of people without jobs also lifted strongly, and consequently the region’s unemployment
rate rose to a 10-year high of 7.0 percent. Despite a fall in sentiment in September,
businesses in the region remain relatively upbeat, with Waikato recording the third
highest level of confidence. The number of rural real estate sales eased 18 percent
in September, falling to a 12-year low. Residential sales also dropped (-15 percent)
with the level of sales sinking to a two-year low.
Bay of Plenty
The Bay of Plenty recorded the strongest lift in the number of dwelling approvals
issued in the September quarter, propelling the series to a three-year high. Commercial
building permits rebounded 5.8 percent after slumping 7.6 percent in the preceding
quarter. Employment in the region lifted 1.4 percent, ahead of the 1.0 percent rise
noted nationally. The Bay of Plenty recorded an 11 percent drop in house sales in
the three months to September, to touch a fresh low. The average time to sell a
house lengthened from 58 to 66 days, which is the slowest sale figure for the region
in 18 months. Nevertheless, at 3.5 percent, the Bay recorded the strongest year-on-year
rate of economic growth.
Gisborne
Following a surge in the June quarter, Gisborne recorded a drop in rural real estate
sales in September. To be sure, the average value of large farms sold was reasonably
firm, but a weakening in the number and value of lifestyle blocks sales weighed
on the overall direction for the rural market. Residential sales were relatively
more resilient, dropping only 7 percent (-10 percent nationally). Meanwhile, the
median time to sell a house in Gisborne held steady, at 61 days. The 1.0 percent
lift in overall economic activity in the September quarter was the second strongest
rise across the regions.
Hawke’s Bay
Business confidence in the Hawke’s Bay continues to trail the rest of the nation.
In September sentiment soured, as pessimists outweighed optimists for the first
time since June 2009. Consumer confidence also remains below the national benchmark
but the gap closed in September, with Hawke’s Bay registering a rise, while the
nationwide figure dropped. The number of rural real restate sales in Hawke’s Bay
eased in the three months to September. This reflected the number of large farm
sales hitting a new low (only five) and the number of lifestyle block sales dropping
to an 18-month low. The residential real estate market posted declines (down 8 percent)
but this was on a par with the nationwide figure.
Taranaki
Employment in Taranaki retraced from the strong rise measured in June. The consequence
of employment dropping to a three-year low was the region’s unemployment rate increasing
from 4.8 to 5.4 percent. Also deteriorating was the number of commercial building
permits issued in the region, which dropped 13 percent, to hit a fresh low. However,
the number of residential building approvals lifted 3 percent, versus a similar-sized
fall nationwide. Business confidence edged down but remained the second strongest
across the regions. The number of house sales hit a new low but the median time
to sell a house shortened, from 59 days in June to 54 days in September.
Manawatu-Whanganui
Manawatu-Whanganui recorded a strong rise in employment in the September quarter
(up 2.7 percent), lifting the series to a four-year high. The number of residential
building permits issued inched up 1 percent which contrasted with a 3 percent drop
nationally. Meanwhile, the number of commercial building consents issued in the
region eased 9 percent to an 18-month low. Accommodation guest nights slipped 5.4
percent, in contrast to a flat outturn for the country as a whole. The number of
sections sold in the region dropped 40 percent from the 12-month high recorded in
June, outpacing the 17 percent drop measured nationally.
Wellington
Wellington recorded a 10 percent fall in the number of residential building permits
issued in the September quarter, returning the series to a 12-month low. Commercial
building consents slipped 1 percent to a 9-month low. New car registrations fell
9 percent, which was the largest percentage decrease across the regions. Wellington
recorded a 1.1 percent drop in employment, pulling the series down to a 12-month
low. Consumer confidence eased, with Wellington slipping one notch down the relative
regional rankings to third position. The number of house sales eased 3 percent in
the September quarter, while nationally the equivalent figure fell 10 percent.
Nelson-Marlborough
Consumer confidence dropped to its lowest level in 18 months, which was the weakest
across all the regions. Business confidence didn’t fare much better, with the region
recording the second-lowest figure across the regions. Employment in Nelson-Marlborough
slipped 0.5 percent to a 9-month low. The rural real estate market posted some solid
gains in the September quarter, with turnover of rural properties lifting 17 percent,
underpinned by an 8 percent rise in lifestyle block sales. Meanwhile, new tractor
registrations increased 15 percent. The 13 percent fall in residential house sales
in the region was larger than the 10 percent decline measured nationally. Annual
economic growth, at 0.5 percent, was the lowest rate measured across the regions.
West Coast
The West Coast recorded a strong rise in several of its economic indicators, which
translated into the strongest lift in overall economic activity in September for
any of the regions. The number of commercial building permits issued in the region
lifted 13 percent to a two-year high. New car registrations rose 14 percent and
commercial motor vehicle registrations increased 23 percent, with both series lifting
to a two-year high. House sales increased 17 percent, to their highest level since
March 2008. Rural real estate sales also registered some strong gains, with the
number of large farm sales up and the sales of lifestyle blocks increasing to a
12-month high.
Canterbury
Despite the major earthquake that hit Canterbury in the September quarter, the region
topped both the consumer and business confidence surveys. However, the quake has
started to impact on some of the partial indicators. The number of residential building
approvals fell 13 percent, while commercial permits slipped 9 percent. The number
of house sales dropped 15 percent, outpacing a more general 10 percent drop noted
nationally. New car registration fell 9 percent, three times the 3 percent drop
measured nationally. Overall, Canterbury recorded the second largest decline in
economic activity in the September quarter.
Otago
Otago recorded the second strongest rise in employment in September, rising 3.5
percent to a new all-time high. The unemployment rate edged down to 3.7 percent,
which is the region’s lowest figure since December 2008. Rural real estate sales
lifted 14 percent, underpinned by a 23 percent lift in the sale of lifestyle blocks,
to reach its highest level of the year. Residential house sales followed the nationwide
figure down, dropping 11 percent from three months earlier. The number of residential
and commercial building permits issued in Otago dropped 9 and 10 percent, respectively.
Southland
Southland recorded a modest lift in house sales at a time when the nationwide figure
was in decline. The region recorded a 1.1 percent rise, to hit its highest level
this year. Employment in the region lifted 1.3 percent, slightly ahead of the 1.0
percent rise noted nationally. The number of new tractor registrations dropped 7
percent, while nationally the figure slipped 2 percent. Accommodation guest nights
dropped 2.4 percent in the September quarter, at a time when the national figure
was unchanged. The number of residential building approvals slipped 8 percent, versus
only a 3 percent drop recorded nationally.
The tables can be viewed as charts on our Regional Trends charts
page.
Back to top