Economy slowdown felt across the board

By earthnews
1 year Ago

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Westpac senior economist Satish Ranchhod says the impact would be more pronounced in regions which are less exposed to the recovery in international tourism. (file image)
Photo: 123RF

The slower economy is being felt right around the country, although Auckland and Otago are doing better than most.

Westpac’s latest regional round-up shows the softening in activity is widespread, with slowing demand and continued strong inflation.

Weaker commodity prices are being felt in the rural economies of Northland, Bay of Plenty, Waikato, Manawatū and Southland, while businesses in Hawke’s Bay and Gisborne are finding it harder to pass on cost increases in the aftermath of the cyclone.

Westpac senior economist Satish Ranchhod said the economic “temperature” was on the cool side in every part of the country.

“Across all regions, we’re seeing some big themes coming through,” Ranchhod said.

“Those are slowing demand across many sectors and continued strong inflation pressures,” he said.

“Some of the regions, like Otago and Auckland, that are benefiting from the return of international visitors as well as increases in the labour force are seeing some firmer conditions.

“But even in those regions, I think a lot of households and business are still going to face some challenges from rises in the cost of living and increases in the cost of doing business.”

Ranchhod said the outlook remained downbeat in the near term.

“That impact is going to be felt right across the country, but it will be more pronounced in those regions that are less exposed to the recovery in international tourism,” he said.

“The big issue to watch is what’s happening on the global front.

“If we continue to see softness in markets like China, that will be felt acutely in our regional areas that have already seen weakness in commodity prices.”