20 January 2019
Media: Bay of Plenty Times
Topic: Business confidence
Enquiry
Reporter writing story for both papers sought general comment from Mayor Chadwick on the latest Westpac economic confidence survey for Bay of Plenty
Westpac report link:
WESTPAC MEDIA RELEASE:
18 January 2019
Economic confidence in Bay of Plenty bounces back from previous sharp fall
A net 37% of Bay of Plenty households expect their region's economy to improve over the next 12 months, according to the Westpac-McDermott Miller Regional Economic Confidence survey for the December 2018 quarter.1 This is an increase on the net 29% of households that expected their region's economy to improve in the September quarter.
"The improvement in household confidence partly reverses a large fall recorded in the previous quarter," said Westpac Chief Economist Dominick Stephens. "Greater confidence in the region is likely to reflect elevated business activity, which has led to the creation of more jobs. Lower petrol prices, rapidly rising house prices and the success of the horticulture industry in the region are also likely to have added to a greater sense of optimism."
The Westpac-McDermott Miller survey also examines consumers' views on their own economic situation, producing an index that summarises responses to questions including how respondents view their own financial situation, their current willingness to buy a major household item and the outlook for the national economy. The Westpac-McDermott Miller Consumer Confidence Index for the Bay of Plenty rose from 109 in September to 110 in the December quarter.
"Consumers in the Bay of Plenty are feeling a little less confident than they were about the New Zealand economy, although most still expect their financial circumstances to improve over the next 12 months," said Mr Stephens. "This may go some way to explaining why households in the region seem to be more willing than before to purchase a major household item."
The survey was conducted over the period 1-11 December 2018.
1 Regional economic confidence is measured by subtracting the percentage of the region's residents who believe their region will experience bad economic times over the coming year from the percentage who believe the region will experience good economic times.
Response
From Mayor Steve Chadwick:
"There's been a substantial amount of business investment in Rotorua during the past few years with new businesses coming in and existing businesses reinvesting and extending their offerings. Meanwhile, CBD vacancy levels have been decreasing and that's despite new retail developments outside of the inner city. All of that points to confidence in our local economy which is translating into more jobs and contributing to the general growth we're seeing, including population growth.
"Council is supporting economic growth through investment in infrastructure, improving key facilities like the lakefront that will in turn drive future private investment and progressing towards re-opening Rotorua Museum while in tourism the focus is on encouraging longer stays and bigger spends.
"The most recent Infometrics results [for the year to September 2018], and our June 2018 local APR business confidence survey also pointed to ongoing strength in the local economy and expectations of improving business conditions. Median house prices are up and the housing market isn't expected to slow in 2019 according to the latest from MRIENZ.
"So this latest [Westpac] survey reinforces what we've been seeing and what we're hearing from the business community, which is very heartening."
Most recent Infometric results (year to September 2018)
- 4.2% GDP growth (3.5% across BOP, 2.9% NZ)
- Tourism spend $827m, up 6.1% on previous year
- 5.3% increase in guest nights (2.7% NZ)
- Electronic card retail spending up 5% (4.8% NZ)
Full Infometrics report is HERE
