A jump in economic confidence in Otago is expected to prove temporary, Westpac economist Nathan Penny says.
Otago recorded the largest jump nationally during the December quarter in the latest Westpac McDermott Miller regional economic confidence survey.
Confidence mostly dipped over the period as Covid-19 restrictions and disruptions weighed on some regions and Omicron concerns emerged in others, but Auckland and Otago bucked the trend.
The lifting of Aucklanders’ travel restrictions would have accounted for much of the improvement, particularly given the timing coincided with the height of the Central Otago tourism season, and record meat returns would have further boosted confidence, Mr Penny said.
But the Omicron outbreak was likely to cut short the tourism season and, with no word on the opening of the country’s borders, the region’s tourism-related businesses were set for another tough year, he said.
Southland households, buoyed by record high meat and dairy prices, were the most optimistic in the country and the agriculture sector was ‘‘firing on all cylinders’’.
The housing market and construction sector were similarly strong; the region’s construction pipeline was the fullest it had ever been. Agriculture’s good fortunes were expected to continue and the region should remain in a good economic patch over 2022, he said.
Regional confidence in Canterbury tumbled in the December quarter, the magnitude of the fall only behind Northland — which was stuck in the Red traffic light setting.
