Nelson and Canterbury are leading the economic surge in the South Island, with Auckland dipping to third spot in the national rankings, according to a bank report.
The latest ASB Regional Economic Scoreboard report also shows Wellington is in the middle of the pack of 16 regions, while Southland sits at the bottom of the rankings.
Nelson leads the rankings, with strong growth in retail spending, and a surge in home building as the region expands to house people moving there from Canterbury after the earthquake two years ago.
The quake rebuild has flowed through to greater economic activity throughout the South Island.
Nelson and Canterbury gained a four star rating in the survey: "be there or be square".
Wellington's economic performance remains mixed, reflecting government belt-tightening, as public sector cutbacks have seen jobs in the region fall in the past year.
Shop spending in Wellington is subdued, and employment has been restrained, even though consumer confidence has held up.
Wellington had a two star ranking and was "in need of energy injection".
Job numbers in Wellington slid 1 per cent in the past year to 269,000. Retail trade rose just 1 per cent in the June year.
But ASB said quake repairs and building strengthening work should boost non-residential construction in coming years around Wellington.
"Economic activity in Wellington remains weighed down by public sector restraint, with the region sitting around the middle of the Scoreboard," ASB chief economist Nick Tuffley said.
House price rises in Wellington have been subdued in the part year compared with the rest of the country, up 2.4 per cent in June year. But there has been a strong lift in house building and commercial construction.
Auckland had held top spot in the regional rankings for 13 of the past 14 quarters, but dipped to third place in the latest survey.
Housing shortages continued to push up house prices, while growth in building work is still lower than other parts of the country.
Southland languished at the bottom of the pile after challenges earlier in the year. The summer drought hit dairy and meat farming, as well as hydro-power production. Consumer confidence in Southland was the lowest in the country and jobs in Southland have fallen sharply in the past year, down 7 per cent.
"But dairy prices are high and the drought is now well and truly over," ASB said, with a more promising outlook for the farming region next year.
- © Fairfax NZ News