Kiwibank’s latest Annual Regional Note, released last week, placed Otago and Southland as the two top performing regions in the country as the South continued to outperform the North.
“The further south you go the better the business climate seems,” general manager Troy Sutherland said.
Ranking a total of 13 regions on a score from 1 to 10, the report summarises seven economic indicators including population growth, retail sales, employment, house price index, house sales, building consents and international tourism electronic card transactions.
Otago and Southland both ranked 5, compared with the national average of 4, activity boosted by a bounce back in tourism, the report said.
Business South chief executive Mike Collins said the results showed that optimism had returned to the region.
“We’ve been always saying the further south, the more optimistic we are about the future.
“I think what we’re seeing there is that optimism is turning into action in terms of people spending and people having confidence in making decisions.”
The region had been “sitting on the cusp” of growth in housing and commercial developments, and decreasing interest rates coupled with more optimism had translated into more transactions around building consents, Mr Collins said.
However, there was still a lot of work to do around sharing the region’s stories of success with the rest of the country.
“Off the back of these kind of announcements, we really need to be coming together across the region and talking about those stories of success and building on those.
“I think the rest of the country don’t really understand how much opportunity there is down here yet.
“There’s so much more to show and tell.”
As a key tourist destination, Otago benefited both in terms of employment and consumer spending, the report said.
“As employment growth across most of the country has gone backwards, Otago recorded a massive 8% increase.”
The region topped the list when it came to retail sales growth, rising about 6.5% in the 12 months to March this year.
Otago also recorded the highest year-on-year growth in residential building consents, a rise of nearly 35% in the three months to May this year.
Southland, Otago and Canterbury — which recorded “materially shallower declines” in house prices than other areas around the country — were either above or close to their post-Covid highs.
House prices in Otago had hovered around their peak levels over the past couple of years, while prices in Southland were 1% higher than their post-Covid surge.
International card spending in Otago and Southland rose 1.4% and 5.2% respectively.
Dunedin Mayor Jules Radich said the results were encouraging for Otago and Southland.
“I think there’s possibly a little bit more optimism in the region since we’ve got the go-ahead and resumption of work on the new hospital, which services the whole region.
“Also, the upturn in farming, the increase in farming returns both in red meat and dairy products is very helpful to the Otago-Southland economy.”
Retail development in Dunedin was also growing, and it was easy to see new buildings taking shape around the city.
While the “lion’s share” of the region’s growth was happening in the Queenstown Lakes District, Mr Radich said he was assured about Dunedin’s contribution.
tim.scott@odt.co.nz
