Bay of Plenty households are the most optimistic in New Zealand when it comes to the economy according to a new survey.
A net 28 per cent of BOP households expect the region’s economy to improve over the next 12 months according to the Westpac-McDermott Miller Regional Economic Confidence survey for the December 2019 quarter.
This compares to the previous quarter where a net nine per cent of households say they expected their region’s economy to improve.
“This sharp rise in confidence in part this reflects the impact of a highly successful kiwifruit season,” says Westpac chief economist Dominick Stephens.
“Lower interest rates, rising house prices and a lift in construction activity, particularly in Tauranga, are also likely to have improved the mood.
“That said, relatively weak log prices in this major forestry region will still be a cause for concern, although the impact on harvesting has been minimal,” says Dominick.
According to the survey, regional economic confidence rebounded in the December 2019 quarter, following a series of declines.
“In total, eight of eleven regions reported a gain in confidence, one moved sideways, while two recorded falls.
“The Bay of Plenty and Gisborne/Hawke's Bay have been the standout regions. Although they have a heightened exposure to lower log prices, both regions are experiencing stronger house price growth, increases in construction activity and elevated prices for a range of horticultural and/or meat products.
“Confidence rose in most rural regions, although mixed conditions ensured that gains were smaller. “Farmers are enjoying strong product prices but remain concerned about the impact of regulation. This is especially true in dairy heavy regions, such as the Waikato and Southland.”
The survey was conducted between December 1-10, 2019.