Growth strong in rural areas

Gisborne, Manawatu and Wanganui have outstripped the economic growth in all other areas of the country in the past few months.

The latest National Bank survey of economic activity published today shows a rise in economic activity in 12 of 14 regions for the three months to June 30.

Gisborne recorded growth of 2.5 per cent and Manawatu and Wanganui 1.8 per cent for the June quarter.

Wellington was at the back of the pack and almost static with 0.1 per cent growth in the quarter.

However, Wellington's year-on-year growth was 3 per cent - still above the long-run average of 2.7 per cent, said National Bank economist Steve Edwards.

Hawkes Bay and Otago were the only two areas to lose ground in the June quarter.

Edwards said the latest figures showed an overall trend of strong growth in rural areas and a slowdown in urban centres.

Growth in rural New Zealand rose 0.9 per cent in June, while urban-based areas grew 0.2 per cent in the same period.

The survey looks at economic indicators including interest rate rises, business confidence, retail and house sales, residential and commercial building approvals and motor vehicle registrations.

A year-on-year comparison to June showed growth of 5.6 per cent for the West Coast, a 22-year high, and 5.5 per cent for Otago, a 20-year high.

Growth in Manawatu/Wanganui was 5 per cent for the year to June, Hawkes Bay 4.7 per cent, Nelson/Marlborough 4.5 per cent, Taranaki 4 per cent and Gisborne 3.6 per cent.

Edwards said the urban slowdown could be the first indicator that interest rate rises were starting to bite.

- NZPA