Regions reap rewards of tourism boom

‘‘Nelson is the place to be.’’ ASB chief economist Nick Tuffley

The national tourism boom is starting to flow through to the regions and has made Nelson the ‘‘place to be’’.

But it is also putting pressure on some of the bigger areas, as Auckland, Canterbury and Queenstown struggle to handle the growth.

Nelson kept top spot in the latest regional economic scoreboard prepared by ASB Bank and Main Report.

Northland shot up seven places to second on the scoreboard, which ranked each of the country’s 16 regions, while Auckland and Otago both slipped.

Nelson topped the country for the second-straight quarter, which ASB chief economist Nick Tuffley said reflected booming tourism, horticulture, viticulture and construction.

The region had also ranked third for new car registrations and was second for consumer confidence.

‘‘The pipeline of construction work has grown more in percentage terms in Nelson than anywhere else.

‘‘Combine that strength with high confidence and the associated retail strength, and the picture is very positive for the coming quarters. ‘‘Nelson is the place to be.’’ Tourism’s boom had also benefited Northland, Tuffley said.

It had slid two places in last quarter’s scorecard, but was now snapping at the heels of Nelson.

‘‘Northland continues to post solid numbers which compare, for the most part, favourably with national averages.

‘‘Confidence is one area which is lower than average, but that’s not impacting sales - the annual growth rate for new car registrations and retail sales is stronger than anywhere else.

‘‘The tourism boom is helping the region, and although the employment figures are ropey these days, Northland’s labour market is clearly improving.’’

While tourism had boosted those regions, growth rates in Auckland, Canterbury and Queenstown had slowed because of capacity constraints for tourism and construction.

Tuffley said Auckland was looking good in most areas but the level of activity was struggling to lift.

‘‘Auckland residential building consents are down on a year ago but not because the demand for homes isn’t there.

‘‘There are simply impediments in the way.’’

Auckland’s major growing pain was simply that it could not build fast enough.

In Otago, Tuffley said capacity constraints were also curbing growth.

Its slowdown was also in part because the area had been running hot for a while, particularly in retail sales.

‘‘This slip is most obvious in the accommodation sector: guest nights can’t lift if hotels are fully booked.’’

Tuffley said Marlborough was still hurting from last year’s Kaikoura earthquake with transport links disrupted.

Future repair work and activity was expected to boost it up the rankings in the future, however.

Canterbury placed bottom on the scoreboard, despite high activity in the region.

Higher dairy prices would give the region a boost coming into next year, Tuffley said. ‘‘The decline in guest nights remains a thorn in Canterbury’s side and is the weakest region in the country for this measure of activity.’’ too many