Everyone can play

Last week’s data has emphasised one of the important themes in the NZ growth story; that the current pickup in growth has become increasingly broad based. Across the country business and consumer confidence is rising, labour market conditions are improving and consumers are gradually opening their wallets a little wider.

For quite some time, Auckland and Canterbury were clearly the brightest stars, with confidence and activity quite flat elsewhere. But such a split is now no longer as obvious. Indeed our March Westpac McDermott Miller Regional Confidence survey showed the number of people optimistic about the outlook for their own region outnumbered pessimists in all New Zealand regions for the first time since late 2009.

Of course, while all regions are now net optimists, some regions are more upbeat than others. In particular, economic confidence in Canterbury remains the standout. The region has now been the most optimistic in the country for seven consecutive quarters as the enormous earthquake rebuild task continues to power ahead. The second and third most optimistic regions in New Zealand were Southland and Waikato respectively – two regions where the dairy industry plays an integral role in the local economy and where the expected record milk price for the current dairy season is set to have a sizable impact.

However, while Southlanders were noticeably more confident in March than December, confidence remains below its heights of 6 months ago in the Waikato, perhaps an indication that the extremely dry conditions in parts of the region are taking the gloss off the record dairy payout for some farmers. Confidence jumped in a number of regions in the March quarter, Northland, Bay of Plenty, Gisborne/Hawke’s Bay, Otago and Southland all recorded notable improvements.