South Island regions lead the way
The South Island emerged as the strongest performer in ASB’s latest economic regional scoreboard for Q1 2024, with Southland and Otago securing the first and second places, respectively.
Auckland dropped to fifth after leading the scoreboard for the past two quarters.
Economic challenges persist across the country, with a cooling labor market and falling migration and tourist numbers.
Subdued economic outlook until 2025
The latest ASB regional economic scoreboard presented a mixed outlook for the country’s growth, according to ASB chief economist Nick Tuffley (pictured above).
Despite modest increases in housing prices and retail volumes, the cooling labour market and soft migration figures suggest ongoing challenges.
“While there were glimmers of hope in some of the numbers, such as soft gains in construction consents and CPI inflation easing to 4%, the unemployment rate sits at a three-year high of 4.3%,” Tuffley said.
“Tourism has underperformed for another quarter and annual net migration has fallen below 100,000 for the first time since May 2023. We don’t expect the fog to lift until 2025, so we’ve got a few more challenging months to get through yet.”
South Island regions lead scoreboard
Southland pushed Auckland from its number one spot, climbing an impressive 10 places from 11th last quarter.
“Southland recorded the fastest building consent growth in the country, increasing by more than 50% year-on-year,” Tuffley said. “House sales and house prices are both up year-on-year, by 32% and 4.4% respectively. We expect Southland’s sterling run to continue next quarter.”
Otago maintained its second-place position for the sixth consecutive quarter, driven by strong housing and employment growth and the pull of international tourism.
Auckland and Wellington see declines
Auckland fell from first to fifth place despite strong population growth and high consumer confidence.
“Auckland’s performance this quarter was middling, with employment and house sales in line with national averages,” Tuffley said.
“We suspect further declines down the scoreboard could be possible with net migration having peaked and Aucklanders continuing to adjust their spending to meet higher mortgages.”
Wellington dropped two places to tenth on the scoreboard, impacted by reduced government spending. It was the only region to see a fall in employment, down 1.9% year-on-year, which also affected retail sales and new car sales.
Access full ASB report
The full ASB regional economic scoreboard, along with other recent ASB reports, can be accessed at our ASB Economic Insights page.
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