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Economic confidence: Waikato households NZ's most optimistic, Westpac survey shows

Tuesday, 29 June 2021

There were large crowds at this year’s National Fieldays at Mystery Creek, at a time when – according to a new survey – Waikato households were the most confident in the country about the future of the economy.
There were large crowds at this year’s National Fieldays at Mystery Creek, at a time when – according to a new survey – Waikato households were the most confident in the country about the future of the economy.

Waikato households are the most confident in the country about the future of the economy, according to the latest Westpac regional economic confidence report.

But local business leaders say concerns about staff shortages are tempering that confidence.

The Westpac-McDermott Miller Regional Economic Confidence survey for the June 2021 quarter revealed Waikato households as the most optimistic in New Zealand, with 21 per cent net confidence. This was up from 12 per cent in March.

Regional economic confidence reflects the difference between the percentage of survey respondents who expect economic conditions in their region to improve and those who expect prospects to worsen over the next 12 months.

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Overall, the survey showed regions with a rural backbone were generally more confident than the large metropolitan centres in the June quarter, although recent bad weather (flooding in Canterbury and drought in Gisborne/Hawke’s Bay) had led to a narrowing in the gap.

Waikato Chamber of Commerce chief executive Don Good.
Waikato Chamber of Commerce chief executive Don Good.

Westpac’s acting chief economist Michael Gordon said the Waikato’s manufacturing and construction industries were “charging ahead”.

“Underpinning those sectors are the hot housing market, as well as the strong agriculture sector,” he said.

“The farmgate milk price is at a very healthy level, while the region experienced some of the country’s best growing conditions over the quarter. It’s no wonder then that record crowds flocked to this year’s National Fieldays.”

Waikato Chamber of Commerce chief executive Don Good said the Westpac survey results didn’t come as a surprise and businesses in the region were busy, but that didn’t mean they didn’t have concerns.

“We’ve just concluded our quarterly business confidence survey and confidence is very strong. However, it’s tempered by a real concern about getting staff. So it’s a double-edged sword.”

Covid-19 and the potential for a future lockdown were still in the back of the mind for most business owners and staff, Good said, “how they cope with that and what they need to do if something does happen”.

“And equally there’s a real concern about the reforms this Government is progressing with, and that tends to make people uncertain as to their future, and business loves certainty.”

Despite all that, Good said “the Waikato traditionally just gets on with it, basically”.

Waikato Federated Farmers president Jacqui Hahn.
Waikato Federated Farmers president Jacqui Hahn.

“And has been doing so for many a long year. Waikato businesses tend to go under the radar and just get on with it, and that’s what they’re doing at the moment.”

Waikato Federated Farmers president Jacqui Hahn said prices and payouts had been good and so had the weather in the region of late, “so if you’ve got happy animals you’re usually happy yourself”.

However, on the other hand, there was the staff shortage.

“If you’re burnt out because there are not enough people and that just escalates, that doesn’t help your mental health,” Hahn said.

“A lot of the rural community is not very happy about the Government at the moment,” she said.

“I hear a lot of grumbles, that’s for sure. Everyone’s happy about the prices, but feeling like the essential work is not being valued is really getting people down.”

Meanwhile, according to Real Estate Institute of New Zealand data, the median house price in Waikato was $730,000 in May this year – the same as the month before, when it was a new record median.

Waikato has now had a record median house price, or equal record price, for four months in a row.

Regional economic confidence* (net confidence %) – June 2021 quarter

Source: Westpac-McDermott Miller

* Regional economic confidence reflects the difference between the percentage of survey respondents who expect economic conditions in their region to improve and those who expect prospects to worsen over the next 12 months. Sample sizes and margins of error vary by region. The survey was conducted over June 1-12, 2021, with a total sample size of 1555.