South Island Regions take top three spots in ASB economic rankings
The South Island has solidified its economic strength this quarter, with Otago, Canterbury, and Southland claiming the top three positions on ASB’s Regional Economic Scoreboard for September.
The Regional Economic Scoreboard measures year-on-year performance across 11 economic indicators, such as employment, building consents, and retail activity.
Otago leads for sustained growth
Otago took the top spot, marking two years of consistently ranking first or second.
ASB chief economist Nick Tuffley (pictured above) attributed the region’s strong performance to tourism recovery, population growth, and robust retail sales.
“It’s been great to see Otago go from strength to strength over the past while. It’s impressive to see such sustained growth,” Tuffley said.
The region’s population growth – ranking fourth nationally – has directly contributed to higher employment rates and spending, driving Otago’s economic success.
Canterbury and Southland show strong finishes
Canterbury secured second place, bolstered by population growth second only to Auckland. The region also enjoyed higher employment levels and house sales exceeding the national average.
Southland rebounded to third after a dip earlier this year, with house price growth leading the country at 4.6% annually. Population growth also contributed to Southland's resurgence, reinforcing a trend of economic strength at both the northern and southern extremes of New Zealand.
Northland, Waikato, and Auckland face challenges
While the South Island celebrates growth, several North Island regions experienced setbacks.
Northland dropped to 13th place due to a sluggish housing market, with house prices falling 1.8% annually. Residential construction activity also declined, though non-residential construction offered some relief with a 77.7% increase.
Tuffley remains cautiously optimistic, citing improvements in agriculture and proposed infrastructure projects like the four-lane highway to Whangarei.
“The proposed re-purposing of the Marsden Point oil refinery into an energy precinct will also strengthen Northland’s economic recovery and resilience,” Tuffley said.
Waikato landed in ninth place, tied with the Bay of Plenty. Consumer confidence remains high despite challenges in employment, construction, and retail sales. House sales grew by 12.4%, outpacing the national average, but prices dipped 0.4%, reflecting broader trends.
Auckland fell further to 14th place. While consumer confidence improved slightly due to lower interest rates, the housing market continued to struggle, with annual sales down 0.6%.
“Auckland… will face significant challenges in 2025 from easing net migration, plateauing regional tourism, and a loosening labour market,” Tuffley said.
However, the ASB economist anticipates a turnaround in the second half of 2025, driven by further interest rate cuts and renewed buyer sentiment.
Optimism for 2025
Despite mixed results in 2024, Tuffley predicts a brighter outlook for 2025 as inflation continues to ease and economic conditions stabilise.
“Inflationary pressures are continuing to ease, which has given the Reserve Bank more confidence in its monetary easing cycle... There is cause for optimism and for New Zealanders to start looking ahead to how they can thrive in ’25,” he said.
Key sectors like construction and retail are expected to rebound in the coming year, while house prices are forecast to recover as market sentiment improves, ASB reported.
About ASB’s Regional Economic Scoreboard
The ASB Regional Economic Scoreboard ranks New Zealand’s 16 regions quarterly based on key economic indicators, including employment, construction, and house prices. Full reports and insights can be accessed on the ASB Economic Insights page. For the ASB announcement, click here.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
