The Westpac McDermott Miller regional economic September quarter survey showed economic confidence in Otago had plummeted 12 points in the quarter.
In contrast, confidence lifted in Southland, with a net 15% of householders expecting their economy to improve over the coming year.
It was one of four regions, along with Canterbury, Northland and Gisborne-Hawke’s Bay, where confidence improved and Southland households were now the third most optimistic in the country.
Those rural regions bucked the trend as agricultural prices hit very healthy levels and, in some cases, record highs, across a broad range of sectors, Westpac senior agri-economist Nathan Penny said.
Canterbury households were the most optimistic in the country while, unsurprisingly, given the extended lockdown, Aucklanders were the most pessimistic.
Confidence slid in Otago as Covid-19 lockdown hit the region’s key tourist hotspots hard once again. Compared to the previous quarter, when the opening of the transtasman bubble buoyed the mood in the Queenstown Lakes district, in this quarter the bubble closed, on top of the domestic lockdown.
Positively, agriculture continued to go from strength to strength and that was likely to keep the economy ticking along in the rest of the region.
Likewise, for Southland, agriculture’s good fortunes were expected to continue and therefore for the region to remain in a good patch too, Mr Penny said.
Confidence in Canterbury lifted a whopping 20 points with a net 25% of households feeling positive about the region’s economic prospects over the coming 12 months.
There was real strength in the region’s economy with both agriculture and manufacturing performing strongly. More recently, the housing market had strengthened and construction activity had also followed.
The nationwide lockdown would have hit retailers and hospitality businesses across the country and Auckland was particularly hard hit by its extended lockdown, he said.
In a double-whammy, activity would have stalled in Auckland’s hot construction sector, as work was permitted only once the region moved down to Alert Level 3.
