Gisborne bright spot in regional gloom

New Zealand's economic activity slumped in the run-up to Christmas to its lowest level in four and a half years.

Nationally, economic growth was 2.2 per cent over the year - up 2.7 per cent in the South Island, and 2.1 per cent in the North Island.

But for the December quarter, overall economic activity rose only 0.5 per cent, the second-lowest fourth-quarter level in three years and down sharply from the September quarter.

The National Bank's regional trends survey - a round up of economic indicators in 14 regions - released yesterday - showed that in 2005, Manawatu-Wanganui recorded the strongest annual rate of economic growth, 3.9 per cent.

The lowest rate was 0.7 per cent in Nelson-Marlborough, with Auckland, recording the second lowest annual economic growth rate, 0.9 per cent.

Figures for the December quarter showed the nation's economic activity rose 0.5 per cent, evenly balanced in the two main islands. Rural areas rose 0.8 per cent, twice the 0.4 per cent increase recorded in the urban areas.

In the last three months of 2005, retail sales eased, with Northland recording the largest decline and Gisborne making the strongest gain.

Of the 11 regions which recorded a rise in economic activity in the December quarter, it was Gisborne which improved most, rising 2.9 per cent from September, followed by Waikato (1.8 per cent) and Hawkes Bay (1.7 per cent).

Manawatu-Wanganui recorded the largest slump in economic activity in the December quarter, dropping 0.9 per cent. Otago fell 0.3 per cent for the quarter which left the full-year growth at 2.3 per cent, a six-year low for the region, and Auckland was down 0.1 per cent.

Indicators such as dwelling approvals and commercial building permits showed significant lifts in Gisborne, with Manawatu-Wanganui falling the most.

Employment growth was relatively flat nationally, with Taranaki showing the biggest fall and Bay of Plenty the largest rise. Southland and Nelson-Marlborough had the lowest unemployment rate, and the West Coast the highest.

- NZPA