Otago's housing and construction sectors are holding up better than in other parts of the country, Westpac’s latest regional roundup report says.
The region was also benefiting from the recovery in international tourist arrivals, which had been a boon for Queenstown, and related lift in hospitality spending.
It was a markedly different picture in many of the more rural regions where the downturn in commodity prices had been weighing on earnings and spending appetites, the report said.
With large increases in living costs and related increases in interest rates, it was unsurprising the economic temperature was "on the cool side" in every part of the country.
That was also consistent with the recent Westpac McDermott Miller Regional Confidence survey which showed households in every region were pessimistic about the economic outlook.
"However, there are some parts of the country, like Northland and Waikato, where economic conditions are downright frosty," the report said.
Visitor numbers in Otago continued to rise, including a boost from the Fifa Women’s Football World Cup.
Pre-bookings for summer appeared good, despite Chinese group visits having not yet returned to pre-pandemic levels.
The region’s housing market also had a strong run with prices up 4% over the past year, in contrast with falls in other parts of the country.
Builders remained busy with work still booked well in advance although some clients had been withdrawing or pushing back plans as increased interest rates and the cost of building made it unaffordable.
Businesses were seeing more applicants for jobs.
Even so, there continued to be upward pressure on wages and good staff continued to jump between jobs to get better conditions or pay.
Businesses in Southland reported sales were generally still at sound levels but were off the earlier highs.
Firm levels of activity in sectors such as health, education and IT were being reported.
