Otago top of the leaderboard for second quarter running
The South Island secures top four places through an uptick in tourism, strong rise in construction and increased consumer confidence
Economic recovery expected to be gradual, rather than swift, across 2025
South Island leads this quarter, with Otago remaining on top
The South Island finished 2024 on a high with Otago, Canterbury, Tasman and Southland taking the top four spots in this quarter’s ASB Regional Economic Scoreboard.
The Scoreboard ranks regions based on year-on-year growth across a range of measures, including employment, building consents and retail sales.
“It’s great to see Otago has achieved another back-to-back victory this quarter and the region could maintain its position for some time.” says ASB Chief Economist Nick Tuffley.
The recent tourism increase has greatly boosted the Central Lakes region, contributing to Otago’s leading position in retail trade and second in employment growth. Retail spending for the region was up 9.1% annually, compared to the national average of 1.4%. Despite the weak labour market nationwide, employment in the region expanded by 2.3% compared to a year ago.
Tasman and Canterbury coming in close behind
Tasman made significant strides this quarter, climbing four spots to third place due to a significant increase in construction and employment, boosting the region’s progress.
“Building consents in Tasman are up 40.6% annually, driven by a 165.8% annual increase in non-residential construction. This contrasts with the national average, which shows only a 0.7% increase in total building consents. It’s interesting to see Tasman is now significantly outperforming the rest of the country in this category.”
Canterbury remains steady and optimistic in second place, with an uptick in consumer confidence, and a robust 3.2% increase in retail sales – more than double the national average.
Gisborne has taken a tumble this quarter to 12th, down 8 places. After a strong 2024, Gisborne’s pace has slowed, with employment in the combined Gisborne/Hawe’s Bay regions declining 6.9%. Retail sales also softened, but there were bright spots, including an 11% rise in new car registrations, well above the national downturn.
Tuffley says that pursuing post-cyclone reconstruction, building resilience in the forestry sector, and improving economic growth conditions may support steady progress in the Gisborne region.
Cautiously optimistic for 2025
Despite OCR cuts, easing interest rates and inflation stabilising, the general state of New Zealand’s economy in the last quarter of 2024 remained weak.
“Thriving in 2025 might take longer than previously expected, with some headwinds facing the economy including rising unemployment and easing net migration inflows.”
“While we are seeing signs of recovery across a number of sectors, and the impact of lower interest rates, geopolitical uncertainties will mean a watching brief for 2025, with particular focus on the two T’s – Trump and tariffs.”
The full ASB Regional Economic Scoreboard, along with other recent ASB reports covering a range of commentary, can be accessed at our ASB Economic Insights page: https://www.asb.co.nz/documents/economic-insights.html
About the ASB Regional Economic Scoreboard
The ASB Regional Economic Scoreboard takes the latest quarterly regional statistics and ranks the economic performance of New Zealand’s 16 Regional Council areas. The fastest growing regions gain the highest ratings, and a good performance by the national economy raises the ratings of all regions. Ratings are updated every three months, and are based on 11 measures, including employment, construction, retail trade, and house prices.
