Household confidence rises in Otago
OTAGO ratepayers are, by and large, more confident in the future than their Southland counterparts.
According to the latest Westpac regional economic report, the potential closure of the Tiwai Point aluminium smelter and the Government’s environmental dairy policies have moved a black cloud over sentiment.
As a result, confidence in Southland plunged from 19% in the September quarter to 10% for the final three months of last year.
‘‘This is the fourth consecutive quarter where household confidence has fallen, and Southlanders are now the secondleast optimistic in the country,’’ the report notes.
Despite the drop of confidence, it appeared Southland’s economy was in ‘‘fine fettle’’ due to elevated dairy prices, an increase in service sector activity and an outperforming housing market.
In Otago, sentiment is actually improving, a net 14% of households expecting economic prospects to improve over the coming year, compared with 10% in the preceding quarter.
Rising houseprice inflation in both Dunedin and Queenstown, low unemployment and an increase in consumer spending have been highlighted as reasons Otago confidence is on the up, the report says.
Otago Chamber of Commerce chief executive Dougal McGowan said there were a lot of goodnews stories out there for the Otago community.
‘‘Government sector investment into infrastructure, buoyant primary sector pricing for dairy, meat and fruit exports are a major part of that,’’ he said.
However, he warned there were some ‘‘pressure points’’ emerging in the area of consumer pricing and high residential rentals.
‘‘Higher house prices are great but it is making it difficult for new home buyers and people who are new to the region, so that is an area that may impact going forward.’’
He said another area of pressure was in the hospitality sector.
‘‘It will also be interesting to see what kind of numbers we get out of tourism spending over the Chinese New Year, which has traditionally been a busy period for tourism hot spots like Queenstown Lakes in particular.’’