Chris Tennent-Brown: ASB Senior Wealth Economist on the results of the ASB Regional Economic Scoreboard

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Why is Canterbury leading the ASB Regional Economic Scoreboard and what factors are driving its growth?

Mike Hosking 0:00
GDP for Q two, as Andrew told us, uh during a war zero point two, surely it'd have to be um pretty miserable not to accept that as a win. Now, for this Friday morning we can present the ASB's regional economic scoreboard, Canterbury Come On In. Retail sales up eight point eight percent, employment up two point six percent, unemployment at just three point six percent, Taranaki is your other big mover. Chris Tenet Brown is the ASB wealth senior economist and is with us. Chris, good morning.
Chris Tennent-Brown 0:31
Yeah, we we were at the um stronger end of the range for forecasts, um and um we're we're really pleased to see it. I think you summed it up right, um with a with a war and an oil shock going on, um you've got to take that as um much better than it than it could have been.
Mike Hosking 0:47
Exactly. Right, the Canterbury story, how much of it's about the South Island versus the farm versus tourism, or is it just Christchurch itself and that's unique?

How did Taranaki achieve its dramatic rise from 15th to 2nd place on the scoreboard?

Chris Tennent-Brown 0:57
I think it's a bit of both. I I've done the scoreboard um in one form or another for a a couple of decades now and uh Canterbury has a lot of drivers. It's surrounded by the rural area, um uh surrounding Christchurch. That's going uh reasonably well and Christchurch itself has got some things that are really pumping. You just need to look at that new stadium and some of the events that have been happening there and the pipeline of um cool games that are gonna be happening over the future and uh all of those things are um are helping keeping things hum along.
Mike Hosking 1:29
What's going on in Taranaki driven by construction, why? Because they've come from fifteenth to second.
Chris Tennent-Brown 1:36
Yeah, so some of this is um so we're we're trying to capture the annual change in growth. So some of it's a b uh a a recovery story there.

What role do dairy and red‑meat sectors play in the economic recovery of Canterbury, Taranaki, and Southland?

Chris Tennent-Brown 1:44
Um but The common theme that with um Canterbury, uh Southland and Taranaki is you they've all got a cash injection coming through from the um from the good dairy story, um the Fontera capital return, um and and and a and a good red meat story as as well. So I think that's all just helping things recover somewhat in Taranaki. It's it's been a it's been a tough time down there um for uh for the Taranaki economy so it's good to see it's um showing a bit more uh signs of growth.
Mike Hosking 2:13
Of course, and when you talk about cows you gotta include Southland. So anything to do with farming broadly is going to have a good result. Is that fair?
Chris Tennent-Brown 2:20
Yeah, uh we can see it in um in in Waikato as well. Um there's a there's a it's a big capital injection coming into the economy in in the in the quarter and some of it's gone to paying down debt, um, some of it's gone into uh construction and um and farm improvements and um consumption as well.

Why is the rural sector considered the best place to find green shoots in New Zealand’s economy right now?

Chris Tennent-Brown 2:39
So that's um that story's flowing flowing through. So the The rural the rural sector is uh is certainly the uh the the place to be for when you're looking for green shoots at the moment.
Mike Hosking 2:49
Right, Auckland, uh there aren't green shoots. They've gone from fifth to sixth. Importantly it's the engine room of the economy, it's not moving. Is that going to turn, do you think, or not?
Chris Tennent-Brown 2:58
I think what we w see with Auckland is uh is how uh flat it is when we're not getting strong migration growth. Um people people coming in, creating demand for housing, consuming are really, really important. Um but th th there's there's signs of light here as well.

What explains Auckland’s stagnant performance and can migration or housing demand revive it?

Chris Tennent-Brown 3:15
I'm I'm looking forward to the C V D improving a lot now that the uh central rail is um is finally underway and hopefully retailers in the C V D can um look forward to a uh a a much nicer environment too.
Mike Hosking 3:28
Uh Texton made a very good point before. That that annual two point six the point two yesterday and all of this sort of stuff. This is done without housing booming. That means we're more robust as an economy, doesn't it?
Chris Tennent-Brown 3:40
It's it's it's pleasing that we um that we've got other gross drivers going on, isn't it? And uh We uh we see it in other surveys we do, like our investor confidence survey, that things like the share market, Kiwi Saver are becoming much more important drivers for um especially for people under under thirty, under forty, um, in terms of generating that wealth effect that we so long associated with housing.

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