Auckland economy climbs out of cellar

Auckland’s economic performance improved in the last quarter of 2018, lifting it from the bottom of the ASB Regional Economic Scorecard.

The latest results, released yesterday, show Hawke’s Bay leading, with a big lift in retail spending and solid numbers across the board.

The survey considers economic data including employment, wages, construction, house prices new car sales and retail sales.

Bay house prices maintained double-digit growth and there was a 38 per cent (annualised) increase in building consents.

The Otago region ranked second, with strong job growth, and Manawatu¯/Whanganui was third, aided by a strong property market and construction pipeline.

But Auckland’s shift off the bottom in the September quarter will be some

relief to those watching the national macro-economic numbers.

Auckland’s performance in the survey has been volatile and after a big dip in the previous quarter it bounced back six places to ninth of 16 regions.

“The regions retailers ended 2018 on a high note,” said ASB chief economist Nick Tuffley. “In a way that wasn’t a surprise, as the fall in petrol prices would have come as a welcome relief to Aucklanders who suffered more than most.”

However house prices were still weighing on Auckland’s economy. It was the only region which saw price falls.

Canterbury was another big riser — up 11 places to fourth. Construction was strong, with large CBD commercial projects under way. There had also been a strong improvement in visitor numbers.

Northland also rebounded — up seven places — with retails sales and housing leading the rise. Its weak spot was job growth, with the number employed dipping, Tuffley said.

The Waikato region had the biggest drop in rankings.

“Fonterra’s lower milk price forecast spilled over into lower consumer confidence and retail spending,” Tuffley noted.

However this was likely to be temporary, with Fonterra having lifted its milk prices since.