Otago jumps up economic rankings

Nathan Penny.
Nathan Penny.
Otago has leapt up the ASB regional economic scoreboard from 12th place to fourth with construction, house prices and retail data overshadowing national averages.

Among the country's 16 regional council areas, Nelson, Tasman and Northland were all ahead of Otago, but none leapt so many places since the previous quarter, ASB senior rural economist Nathan Penny said.

''In particular the [Otago] region is generating jobs at a rate of knots,'' Mr Penny said.

Nationally, job creation was up 3.1% and 5.1% in Otago, retail sales growth sat at 5% with Otago up 10%, house prices were up 4% nationally and 14% in Otago, while construction was down 3% around the country, but up 14% in Otago.

Chamber of Commerce chief executive Dougal McGowan said the data was ''great news'' for Otago, as it headed into the spring trading period.

''There's positivity across the region and across many sectors with more jobs, higher retail spending, new car sales still at record levels and huge lifts in both construction and house prices,'' he said.

However, Mr McGowan said there was evidence of capacity constraints, with housing infrastructure and skill shortages still a worry. Demand was outstripping the ability to deliver in reasonable timeframes, in some cases.

Mr Penny also noted he was keeping a watch on Otago's capacity restraints, especially in the housing and hotel sectors.

Other separate, recent surveys have found lack of skilled staff is holding back many Otago businesses from growth, including the construction, tourism and hospitality sectors.

''But for now, Otago is good value for its [top] five-star rating,'' Mr Penny said.

Otago's retail sector had posted strong data, up 10% for the quarter, fourth only to the Bay of Plenty, Northland and Nelson.

''All up, Otago posted strong numbers across the board,'' he said.

Nationally the retail sector had ''boomed'' for the quarter, up 5%.

''In particular, the Lions tour as well as the World Masters Games boosted spending in tourism-related sectors.''

He noted that nationally house price market activity was slowing, with June sales numbers down 23% on a year ago while house price growth had eased to just 4% higher, compared to a 12% gain for the quarter to December.

Otago house prices had gained 14%, to $463,000, as bank restrictions bit in other main centres and buyers looked for bargains further afield in regional areas.

Mr Penny said Fonterra' s boost to its milk payout forecast for next season should boost spending, particularly in rural areas, during the rest of 2017.

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