Northland has a 'ripsnorter' end to 2020, retaining its spot as fastest-growing region

Monday, 29 March 2021

Northland held on to its spot as the fastest-growing region.

Northland has retained its top spot for economic growth, with a “ripsnorter” end to 2020, according to ASB’s latest regional economic scorecard. Otago was the bottom performer, as tourism remained weak.

The fourth quarter of 2020 was “another ripsnorter for Te Tai Tokerau, which keeps its crown at the very top of our scoreboard”, ASB economist Nat Keall said. The region rose from eighth to take the lead in the third quarter.

Northland’s job growth topped the poll, up 4.8 per cent, and the region was also in the upper half of the survey for most of the other indicators, including retail sales, residential construction, and house sales.

“It is a good comeback story for a part of the country that still has pockets of real hardship,” Keall said.

Tourism Minister Stuart Nash talks about New Zealand tourism in Queenstown. (First published March 2021)

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“We suspect the strength of the forestry sector might be one factor that is helping. Prices have made steady gains over the past few months. Solid demand out of China and construction-fuelled strength in the local market are helping.”

Still, Keall said he would be keeping an eye on the north next quarter, given drought conditions over summer.

Otago remained in the bottom position for the second consecutive quarter.

“The region’s low ranking is a perfect illustration of the struggles faced by the tourism-dependent regions of the country, with Queenstown still suffering from the lack of international travel,” Keall said.

Otago’s retail sales were among the weakest in the country in the quarter, down 7.7 per cent. In addition, jobs growth was negative, it had the lowest ranking for building consents, and it was the least optimistic region for consumer confidence.

Kiwifruit growers benefited from record returns last season.

That may have influenced neighbouring Southland, which fell five places to rank as the second-weakest region alongside Marlborough, which tumbled eight places.

“The home of winemaking and whale watching usually draws a glut of tourists at this time of year but border restrictions are continuing to weigh,” Keall said. Building consents were weaker but retail sales were slightly above the national average.

The rural heartland continued to outperform urban centres, with Hawke’s Bay, Gisborne and Bay of Plenty in second position behind Northland, Keall said.

Bay of Plenty benefited from a fantastic kiwifruit season, as well as growth in its housing market and retail sales. Despite the recently announced closure of the Whakatāne mill, the broad strength of the horticulture and forestry sectors would continue to support the wider region, Keall said.

Gisborne moved up seven points in the latest quarter, with annual house price growth up a “whopping” 31 per cent, outstripping everywhere else, a booming residential construction market, and the largest year-on-year lift in retail sales, Keall said.

Hawke’s Bay advanced three points, with positive consumer confidence, retail sales, and new car registrations. Still, the region’s construction boom was starting to slow after strong growth, he said.

The West Coast lifted three places to fifth helped by growth in house sales, construction, and car sales. However, border closures continued to bite, with retail sales down, in contrast to the rest of the country.

Waikato slipped three places to sixth with strong retail sales but slower construction growth. A lift in milk prices should boost the dairy heartland in the quarters ahead, Keall said.

Among the main centres, Wellington remained at 11, Auckland gained four places to ninth, and Canterbury advanced two places to 13.

Taranaki lifted two places to 10, as improvements in the housing market offset a decline in employment.

“There is a bit more hurt to come with the closure of the Waitara methanol plant,” Keall said.

Manawatū-Whanganui dropped one place to eighth as a rise in house prices failed to flow through to construction activity.

Nelson remained steady at seventh place and Tasman slid eight slots to 12.