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Of the 16 regional council areas in the quarterly ASB economic scoreboard released yesterday, Otago's employment growth was down 9%, compared to a no-change 0% national average.
In a separate ANZ business outlook survey yesterday, unemployment was also the dampener to otherwise positive company expectations, chief economist Cameron Bagrie said.
Intentions continued to "firm" for profit (up 10%), employment (6%) and investment (17%), but rising unemployment data did not match those business expectations.
"Questions surround whether growth in hiring will be sufficient to mop up new entrants into the labour market," Mr Bagrie said.
The regional survey said Auckland retained the top spot in the latest report, where relatively strong population growth drove retail spending and housing market activity which overshadowed its own relatively high unemployment rate, ASB chief economist Nick Tuffley said.
Nationally, house sales and price rises led activity, but all the other survey indices - employment, wages, retail sales, car registrations and construction - were lacklustre.
Just five of the 16 regions had negative employment growth, headed by Otago's drop of 9% and followed by Northland, Auckland, Bay of Plenty and Waikato, all of which fell between 2% and 5%.
"Otago is firmly middle of the pack, based on its patchy economic performance over the last year," Mr Tuffley said.
Otago construction activity, particularly non-residential, had been "reasonably strong", retail sales had risen "steadily" and house prices had increased, he said.
However, there was a "sharp" employment drop to about 9% lower than a year ago.
"That's somewhat at odds with the other regional data, which suggests steady economic expansion, but suggests the Otago jobs market is difficult at the moment," Mr Tuffley said.
Separate surveys earlier this month for the same previous quarter, outlined a roller-coaster ride for the Otago Southland manufacturing sector, from monthly expansion, to contraction and back to expansion.