Otago third in economic growth

Exports of meat have risen to fever pitch this year, increasing 58% in September, following China's ASF virus. Photo: Stephen Jaquiery
Exports of meat have risen to fever pitch this year, increasing 58% in September, following China's ASF virus. Photo: Stephen Jaquiery
Otago continues to flex its muscles as a regional economic powerhouse.

Growth over the past quarter has come on the back of construction and primary export strength.

Latest regional numbers position Otago as third in growth for the past quarter, at 2.8%, narrowly pipped by Hawke's Bay at 2.9% and Tasman which expanded 3.2%.

Infometrics senior economist Brad Olsen says key drivers of growth include construction, with consent numbers up around 11% and 35% across residential and non-residential respectively.

''Construction activity continues to grow at pace as New Zealand attempts to make up shortfalls in housing, services and infrastructure from rapid population growth over previous years.''

In the Otago context, population growth remained a key driver of growth, he said.

''When you take into account population growth, reflected in health enrolment figures in Otago where were up 4.6% for the period, that is one clear indicator that demand will be increasing.''

He said consumer credit card spending was also up 4% in Otago, ahead of the 3.4% New Zealand average.

''So Otago is showing growth and we are still willing to spend money,'' he said.

Supporting growth are also the growth in primary product pricing, particularly across dairy and meat sectors.''

Mr Olsen said on a broader level, latest dairy pricing estimates would put an additional $1.3billion in dairy farmers' pockets around the country next year. About $75million of that was headed to Otago and another $170million to Southland farmers.

There were warning signs emerging over the longer term, however.

''Traffic flows have slowed further, spending growth has moderated and tourism activity continues to weaken.

''There's also a growing divide between current activity and the future outlook, with global and domestic uncertainty at odds with current growth,'' he said.

Otago Chamber of Commerce chief executive Dougal McGowan said the numbers were positive, although it would be interesting to compare the numbers and data across the region.

brent.melville@odt.co.nz

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