Bay of Plenty knocks Auckland from top spot on ASB regional economic scoreboard

A strong housing market and jobs growth has seen the Bay of Plenty knock Auckland from the top spot as New Zealand's best-performing region, in the latest ASB/Main Report Regional Economic Scoreboard.

The Bay of Plenty had moved from second place in the previous quarter and ASB chief economist Nick Tuffley said the region was benefiting from house sales, house prices, and construction all being star performers over the third quarter of 2015.

'We're hearing stories about happy, cashed-up Aucklanders moving to the region", he said.

The Bay of Plenty's employment rate is well above the national average at 6.1% for the September quarter. Auckland slipped to second-equal with Northland in the rankings while at the other end Wellington and Taranaki tied for last place.

Mr Tuffley said a degree of softness had crept into Auckland's labour market this quarter, with employment growth on par with the national average at 1.5% and consumer confidence also took a hit and is at the lowest level in three years.

Strong migration though continues to lift Auckland's population growth and support retail and car sales and house prices. "These factors suggest it is the sheer growth in numbers that is keeping Auckland churning at the moment," the report said. Housing construction, while high, still needs to pick up to meet demand in the region, particularly as the recent Reserve Bank and government rules changes have an impact.

Northland and Waikato are also basking in Auckland's halo effect, Tuffley said.

In Northland, house prices, retail spending, construction, new car sales and guest nights all gave a boost to the region's rankings, which rose three spots. However, employment growth remains below the national average at less than 1%.

Waikato ranked fourth on the scoreboard with its economy remaining strong as house prices have doubled in the past quarter compared to a year ago and are continuing to rise. Construction also outperformed over the quarter, driven by more houses being built despite the downturn in the dairy sector.

Taranaki went down two spots as it continues to struggle due to the twin downturns in dairy and energy. Unemployment is rising and construction activity falling, particularly in the commercial sector.

Wellington remains mediocre at best and is also down two spots on the scoreboard. Unemployment is rising while retail trade, new car sales and house prices continue to track at levels well below the national average. Even tourism, which is buoyant nationally, is slow in the capital with guests night lower this September than the same month a year prior. Commercial construction appears to the the region's one bright spot.

(BusinessDesk)