The Westpac Regional Roundup report shows Southland’s economy blooming brighter, tying with Gisborne-Hawke’s Bay for the top ranking, although this ranking falls within the “cool” category.
The report utilises an “economic temperature gauge” that classifies regional economic activity on a scale from frosty to hot. The top of the South Island, the West Coast, Bay of Plenty, and Northland were rated as frosty—the lowest ranking. In contrast, Auckland, Wellington, the lower North Island, Canterbury, and Otago were classified as cold, the second-lowest category.
The positive feedback from individuals in the South Island was attributed to better conditions in certain agricultural sectors, such as dairy and horticulture, along with a steady recovery in international visitor numbers that has boosted spending in places like Queenstown.
The region’s labour market was in better condition than many other areas of the country, with an employment rate of 3.7%.
Retail spending levels have been stronger than in many regions of the country, increasing by 1.5% over the past year; However, numerous hospitality businesses continue to face challenges.
“In Dunedin and other parts of the region, many businesses told us that there was no momentum in demand. The retail and hospitality sectors are still doing it tough, and many businesses have been shedding staff,” Westpac senior economist Satish Ranchhod said.
Ranchhod also said households and businesses across all regions reported persistent challenges. However, feedback indicated that some of these difficult conditions were beginning to show early signs of improvement, leading to increasing optimism regarding the economic outlook for 2025.