Canterbury has taken back the top spot on ASB’s Regional Economic Scoreboard after a single quarter away, while Wellington slipped back to the bottom of the table and now shares last place with Gisborne. The bank’s June quarter scoreboard, released this week, ranks the economies of New Zealand’s 16 regional council areas against 11 measures including employment, retail trade, construction and house prices.
The June quarter numbers show a country pulling apart along a familiar line. Regions with heavy exposure to dairy and meat filled the podium. Canterbury finished first, Taranaki second and Southland third. Five of the nine North Island regions finished in the bottom half.
ASB acting chief economist Kim Mundy told RNZ that Canterbury “has the full package right now”. Mundy said “households are spending, businesses are investing, the labour market remains resilient and strong dairy returns are providing an additional boost to the economy”.
The Canterbury numbers back that up. Core retail sales in the region rose 8.8% on a year earlier, the strongest result in the country. Employment was up 2.6% and the regional unemployment rate fell from 4.4% in the March quarter to 3.6% in June, among the lowest anywhere in New Zealand. House prices lifted 3.3% over the year at a time when the national index went backwards, and the population grew 1.1%.
One detail in the report cuts against the assumption that visitors were doing the spending. Tourism spending in Canterbury actually fell 4% over the year. “What’s interesting about the retail data is that we can see there’s been a 4 percent year-on-year decline in tourism spending in the region, suggesting the strong retail sales in Q2 were driven by locals, rather than visitors,” Mundy said.
Much of the strength across the top three regions traces back to a single payment. Fonterra’s $3.2 billion capital return, funded by the sale of its Mainland Group consumer business, landed in farmers’ accounts in mid-April. ASB’s report says the money appears to have been split between paying down farm debt, reinvesting on farm, spending and building cash reserves, and that the payout together with firm export earnings was the main driver of strength in the dairy and meat regions.
Nowhere is that clearer than Taranaki, which the report describes as pulling “the ultimate U-turn”. The region was second to last a year ago and finished second this quarter, its best placing since it topped the table in early 2023. Construction activity jumped 47.1% on a year earlier, new car registrations rose 21.6% and employment growth was the second fastest in the country at 3.1%. ASB notes the bounce was helped by a weak base and that softness in oil and gas has not gone away, leaving dairy and meat to carry the region from here.
Southland climbed five places to third on the back of the most resilient housing market in the country. House prices there rose 7.5% over the year and sales lifted 2.5%, both the fastest nationally, while new car registrations were up 32.4% and retail sales rose about 7%. The weak spot was jobs, with employment down 2.9%. The report points out the headline 4.7% unemployment rate flatters the picture, because the participation rate fell from 72.3% a year earlier to 69.7%, meaning people left the workforce rather than found work.
Wellington went the other way. The capital’s tentative improvement in the March quarter did not last, and it underperformed the national average on almost every measure except retail sales, which rose 2.9%. Employment was flat, down 0.1%. The population did not grow at all. Construction fell 18.7% over the year on a sharp drop in non-residential consents. House prices were down 3.4% and sales down 7.2%, with the report noting the median house price now sits about 28% below its October 2021 peak, described as a significant erosion of wealth for anyone who bought in the last boom.
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Mundy put the capital’s problem down to a combination of factors rather than any one. “You’re not getting the population growth, so these do all feed into that broader malaise of the Wellington economy at the moment,” Mundy said. The report is blunter, calling Wellington’s housing market its Achilles heel and pointing to public sector layoffs as the reason living in the capital has not been an attractive proposition of late. One bright spot sits in the pipeline, with residential building consents improving strongly over the year, which ASB says could support the market if those consents turn into actual building.
Gisborne shares the bottom rung for different reasons. Consumer confidence in the region, measured alongside Hawke’s Bay, fell from an optimistic 100.8 in the March quarter to a pessimistic 79.9 in June, the lowest reading in three years. New car registrations were down 10.1% and house sales down 17.9%, ranking the region 16th of 16 on both. ASB links part of the weakness to repeated closures of the Waioweka Gorge highway, which it says cost growers millions of dollars a day in extra costs and lost income and raised doubts among investors about the region’s long-term access. The road fully reopened in late August, which should ease the constraint in the current quarter.
Auckland dropped another place to sixth, underperforming the national average in most categories. House prices fell 2.7% and sales 4.9%, with the market still favouring buyers. Retail sales rose 6.5% and construction 10.8%, and the population grew 1%. “Population growth and tourism are providing some support to the region, but Auckland’s economy continues to contend with cost-of-living pressures, interest rates trending higher, a soft labour market and ongoing uncertainty,” Mundy said.
The biggest fall belonged to Bay of Plenty, which went from first to 11th as construction demand weakened, house sales fell 7.8% and consumer confidence dropped. Employment growth slowed to 2.2% from 5.2% the previous quarter, though ASB notes that follows a bumper kiwifruit season a year earlier. Otago slid off the podium to fifth despite solid retail and construction numbers, undone by a 5.3% annual fall in employment, the largest decline in the country. Waikato finished fourth, and Northland and the West Coast tied for ninth.
The backdrop was hard work for everyone. Annual inflation jumped to 4.1% in the June quarter, the highest since early 2024, driven largely by fuel, with petrol up 20% and diesel up 48% over the quarter. Unemployment hit 5.6%, an 11-year high. Retail volumes fell 0.5%, tourist arrivals fell 1.2% and net migration for the year came in under 18,000. Against that, export volumes rose 6.4% in the quarter and were 10% up on a year earlier. That export strength is what kept national growth in positive territory.
ASB expects the split to hold. The bank forecasts inflation around 4% for the rest of 2026, unemployment above 5% and the Official Cash Rate rising to 3.25% by December after hikes in July and September took it to 2.75%. Higher borrowing costs and stubborn living costs will weigh on spending and on any housing market recovery, while exports keep doing the heavy lifting. “We expect the two-speed economy to persist for a while longer,” the report concludes.
The full scoreboard is available as a PDF report from ASB, and the NZ Herald also covered the release.
Is your region doing better or worse than the scoreboard suggests? Tell us what you are seeing where you live in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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