Cities outstrip rural regions in growth

Metropolitan areas grew apace in the June quarter, shrugging off a slowdown in much of the rural heartland, the National Bank says in its monthly regional survey.

Eleven of the 14 regions recorded a rise in economic activity in the quarter. Southland, Taranaki and Gisborne registered declines.

Fastest growth was shared by the Bay of Plenty and Wellington at 1.8 per cent.

Economic growth in urban and rural regions showed a marked difference. Auckland, Wellington and Canterbury combined grew 1.2 per cent in the June quarter, says National Bank economist Steve Edwards. In contrast, rural New Zealand grew 0.6 per cent.

This is the widest disparity in rural-urban growth rates for four years.

Bay of Plenty topped the year-on-year growth rates at 4.2 per cent. Construction was strong in the region.

Wellington was the only region to record an acceleration in year-on-year economic growth - to 3.2 per cent - posting its third straight rise.

Urban centres' average activity rose 3.3 per cent in the 12 months to June, versus a 3.2 per cent rise for rural regions. This is the first time in more than three years that the urban areas have outpaced their rural counterparts.

Auckland's June quarter activity was 0.9 per cent and year-on-year 2.9 per cent.

Business and consumer confidence were above national averages but the region recorded falls in guest nights, job ads and employment.

House sales were on a par with the national average but the number of days taken to sell a house lengthened slightly.

Canterbury posted its eighth consecutive rise in economic activity, with a 1.1 per cent increase in the June quarter.

Year-on-year activity was equal-fastest with Bay of Plenty's. Canterbury had the third-highest confidence level, house sales jumped and employment posted a strong rise.

Southland recorded its second straight quarterly decline - 1.3 per cent - and consumer confidence was the lowest of any region.

Growth rates in house sales and employment and the level of business confidence were the second-lowest in the country.

Southland's year-on-year activity growth at 1.3 per cent was twice as sluggish as the next slowest region, Taranaki.

- NZPA