Tourism boom keeps Otago at number one in ASB’s economic rankings
Otago has maintained its position as New Zealand's top-performing regional economy, leading ASB Bank's quarterly rankings for the second consecutive time.
The South Island continues to demonstrate economic resilience, with Canterbury securing the second spot in the bank's assessment of 16 regional economies for the final quarter of 2024.
ASB chief economist Nick Tuffley attributes Otago's success largely to the tourism sector's revival, particularly in the Central Lakes region.
"The recent tourism increase has greatly boosted the Central Lakes region, contributing to Otago's leading position in retail trade and second in employment growth," Tuffley noted, while adding that "the Fast-track Approvals Bill has facilitated several projects” in the region.
Meanwhile, Canterbury's strong performance has been driven by robust agricultural outcomes. The region has also seen positive trends in retail sales and house sales, with high export prices and energy projects expected to maintain its growth trajectory.
Both regions have consistently dominated the economic rankings for the past four years, and current indicators suggest this pattern will continue.
Tasman and Southland secured the third and fourth positions respectively, both benefiting from strong construction activity and agricultural performance.
In stark contrast, New Zealand's major urban centres are struggling economically. Auckland ranked 11th out of the 16 regions, with ASB describing the country's largest city as having "a case of the economic blues."
Despite higher consumer spending, Auckland faces challenges including a stagnant housing market, declining residential construction, and rising unemployment.
Wellington fared even worse, placing 15th, just ahead of last-placed Taranaki. The capital's poor performance stems from increasing unemployment.
Additionally, consumer confidence remains low and house prices have fallen, though some commercial construction activity provided a minor offset.
"Despite emerging uncertainties from external factors, there are signs of recovery across sectors as the impact of lower interest rates feeds through the economy," he said, while tempering expectations by adding, "However, we expect a gradual recovery throughout 2025.”
The regional economic divide between the South and North Islands appears to be widening, with the tourism-dependent and agriculturally diverse southern regions showing greater economic resilience than their northern counterparts.
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