Midwinter blues deliver hit to confidence level

21:24, Jun 24 2014

Top of the south households seem to have a case of the winter blues, with regional confidence dropping 18 percentage points in the past three months.

Regional economic confidence among Nelson-Marlborough-West Coast households has taken a sizeable dip and sits below the national average, according to the latest Westpac McDermott Miller Regional Economic Confidence survey.

Westpac chief economist Dominick Stephens said households expecting good economic times in the region over the year ahead fell from a net 38 per cent in March to a net 20 per cent in June, below the national average of 32 per cent.

"After steadily improving over the last 18 months, economic confidence fell in Nelson-Marlborough-West Coast in June," he said.

"There has been little jobs growth in the region of late, and indicators of residential building activity have broadly trended sideways."

The region's consumer confidence also fell, from 120 in March to 118.3 in June, still below the national average of 121.2.


"Consumers have become a bit less optimistic about prospects for their finances, and less willing to buy a major household item," Stephens said.

The survey was carried out in the first 10 days of this month.

Economic confidence remained in optimistic territory throughout New Zealand, Stephens said, but the degree of optimism had faded in most regions.

That consumers were not quite as upbeat about prospects for their economies as they were three months ago was no surprise, he said.

"While the New Zealand economy as a whole is growing strongly, a number of the key drivers of recent growth have started to lose some of their lustre.

"International dairy prices have fallen sharply, which for dairy farmers means this season's payout is forecast to be well down on last season's record-breaking level.

"In addition, housing markets in many parts of the country have slowed under the weight of loan to value ratio restrictions and rising mortgage rates. What's more, the Reserve Bank hasn't been shy in telling consumers that interest rates are set to rise much further from here."

Blenheim retailer Kim Andrews said business at department store Thomas's had been slow.

A fashion retailer relied on winter being cold to get people to buy, and so far, it had not been much of a winter, Andrews said.

"June and July is never a fantastic time."

Marlborough Chamber of Commerce general manager Hamish Macfarlane said he wondered if those surveyed had "a dose of winter blues". The survey didn't "gel" with what he was hearing.

Winter was often a time for businesses to regroup and get ready for the next season. The chamber had won another round of funding for businesses, largely for training, which was available.

"If businesses are finding it a bit tough, they could give the chamber a ring and we'll see if we can't arrange some training for them."

The Marlborough Express