Northland’s strong economic performance no surprise: Westpac

Luke Parker
Northland’s strong economic performance no surprise: Westpac

Recent data showing strong economic growth in Northland comes as no surprise to some of the region’s top commercial bankers and financial advisors.

Stats NZ data released last week showed Northland’s GDP had grown four percent for the year to March 2016, and 18.2 percent over the five years since 2011. At the same time, the March 2017 Westpac McDermott Miller Regional Economic Confidence report showed a net 14 percent* of Northlanders surveyed were positive about the region’s economic prospects for the coming 12 months.

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Jeanette McGlashan, Westpac’s Northern Regional Manager, says the latest report continues a strong turnaround in sentiment over the past six months.

“A year ago, net numbers for Northland were sitting at negative 14 percent and last December was the first time in more than two years the province posted a positive number,” says Jeanette.

Jeanette says a buoyant local property market has helped underpin the shift.

“Sales volumes are steady, and the median price has strengthened significantly, which gives people a sense of confidence,” she says.

And while Aucklanders wanting to escape the City of Sails have long looked to the North, Jeanette says the make-up of the new arrivals is changing.

“We’ve always attracted retirees, now we’re attracting a greater number of people who still have a fair few years of their working life ahead of them – and they’re setting up businesses and looking for staff and for IT and other support services.” 

Rod Parkinson, who runs Westpac’s Commercial and Agri banking across Northland, says tourism and forestry have been strong performers, and this looks likely to continue.

“Tourism contributed more than $1 billion to Northland’s GDP for the first time, overtaking dairy as the region’s main earner, and a lot of our customers in the tourism and hospitality sectors are expanding and taking on more staff,” says Rod.

“In forestry, log prices are well above long-term averages, and both domestic and overseas demand seem likely to remain steady in the foreseeable future.

“Longer term, future supply volumes are a bit uncertain: it will be interesting to see how that plays out,” says Rod.

Rod says the dairy sector will continue to have an important role in Northland’s economy.

“While the drought means an improved payout will be offset by lower volumes for the 2016-2017 season, global market conditions are a lot more favourable than a year ago and we currently expect commodity prices to improve somewhat over the coming year.”

*This number is calculated by subtracting the number of households expecting bad economic times over the next year from those expecting good economic times and expressing the difference as a percentage of the total number of respondents.

SEE ALSO: Small towns, big hitters

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