Regional economic confidence among Otago households has slipped into pessimism for the first time since mid-2009, the latest Westpac McDermott Miller regional economic confidence survey says.
However, Westpac chief economist Dominick Stephens said the latest figures were "slightly puzzling", while Otago Chamber of Commerce chief executive John Christie said it was "a bit of a surprise".
The survey showed households expecting good economic times in the region during the year ahead fell from a net 0% in December to net -9% by March.
That compared with the national average of a net 3%.
The bank had taken the strength of Dunedin's housing market as a "vote of confidence" in the region and Mr Stephens questioned whether the drop in regional confidence had to do with the outlook for the tourism industry.
"The high New Zealand dollar and economic weakness in source countries, including Australia, certainly have us concerned about a weaker winter tourism season ahead," he said in a statement.
Separately, the regional breakdown of the Westpac McDermott Miller consumer confidence index showed Otago consumer confidence rose from 101 in December to 105, above the national average of 102.
While Otago households had turned pessimistic for their local economy, they had become slightly less downbeat about their own financial situation, Mr Stephens said.
It only took "one or two little things" to make people feel more optimistic or pessimistic, Mr Christie pointed out.
The economy was showing signs of picking up and, by the end of the year, he expected to see some "very positive" economic data coming out about Otago.
While consumers' confidence in their local economy fell in most regions, regional confidence remained positive in key dairy exporting regions, as well as Auckland and Canterbury.
Regional economic confidence in Southland was down from December's highs, with a net 43% of households now expecting mainly good times for the region during the year ahead.
The lower-forecast dairy payout and lower meat schedules might have taken the gloss off the "supreme confidence" the region expressed late last year, but it was still the most confident region in the country and had the lowest unemployment rate.
Economic confidence in Canterbury took a knock, possibly due to December's aftershocks. However, it remained optimistic on balance and had the highest confidence reading of the main centres.
On balance, 8% of households now expected mainly good times during the year ahead, down from 17% three months ago.
While parts of the economy were struggling, repair and reconstruction work had been increasing, the market for non-damaged homes had picked up, and retail spending had recovered some of the ground it lost after February last year.
