Wellington tops list of most economically depressed regions

Wednesday, 20 August 2025

Wellington’s jobs recession is the worst in the land.

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Auckland was miserable. Nelson was grim. But for the June quarter’s most economically depressing region, Wellington beat all.

The capital remains in a jobs recession, data from Infometrics shows.

Job losses and insecurity continue to be felt across New Zealand, with employment growth in clear negative territory everywhere except the deep south of Otago and Southland where tourism and the dairy sector have been in growth mode.

Nationally, employment contracted 1.7% in the 12 months to the end of June, but in the Wellington region employment fell 3.1%. That compared with a contraction of 0.4% in Canterbury and 1% in Waikato.

Infometrics principal economist Nick Brunsdon said: “The main centres continue to bear the brunt of job losses, with employment falling 3.1% per annum in Wellington region and 2.1% per annum in Auckland.”

Wellington, for which the June figures were markedly worse than in March, was a story of public sector jobs cuts, and in the service sector that earns its crust supporting government.

The Minister of Finance also received assurances from banks and investment funds that we're still considered a safe place to lend money to.

In Auckland, it has been a story of miserable consumer confidence and a crash in housebuilding and construction, Brunsdon said.

“In our largest city, jobs are down 18,000 from where they were a year ago,” said Brunsdon.

“Southland was the only region to record employment growth, with a gain of 0.2%,” he said.

“Dairy prices have been really strong which really helps the south,” he said.

“There’s a little bit of tourism helping,” he said, but that growth was stalling.

There were signs of the economic recovery the Government hopes will blossom into life before the 2026 general election, however.

“I think we do see signs, but it is going to be a pretty slow recovery. We are not going to jump up to 2%, and everything is hunky-dory again,” Brunsdon said.

Provisional estimates from the Infometrics June 2025 quarterly economic monitor show underlying quarterly economic activity rose 0.6% pa in the June quarter, but remains down 0.8% on average over the 12 months to June compared with a year earlier.

Nick Brunsdon, senior economist Infometrics, says there are signs of economic growth returning to the country.

“The June 2025 quarter marks the start of New Zealand’s economic recovery, with economic activity higher than a year ago across nearly all regions, albeit by a slim margin, and edging up from much weaker conditions last year,” he said.

It was rural areas that were leading the recovery, he said.

“The dairy pay-out is forecast to be similar to last seasons’ record high of $10/kgMS. Meat, horticulture, and seafood prices are holding up at solid levels too, all of which will add to eventual higher spending and investment locally,” he said.

In cities consumer spending remained really weak, he said.

He noted impressive figures recently highlighted by ASB that many households with mortgages had been choosing to pay off their mortgages faster as home loan rates fell, rather than going out to shops and restaurants to spend.

“Customers have made $17 billion worth of additional payments to pay down their home loans,” ASB chief executive Vittoria Shortt said last week.

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