Economic recovery off to slow start, rural areas buoyed by exports
Rural economies are being buoyed by better dairy, meat and horticulture export prices.
Photo:
Gianina Schwanecke / Country Life
New Zealand's economic recovery has begun with a whimper, rather than a roar, with the momentum coming from rural areas, according to consultancy Infometrics.
Principal economist Nick Brunsdon said growth was lower in every region of the country in the first three months of the year.
"Rural economies are currently New Zealand's strongest performers, with rural area GDP down just 0.4 percent a year, buoyed by better prices for our dairy, meat and horticulture exports."
Brunsdon said economic activity in urban areas, with a concentration of construction, manufacturing, retail and professional services, is still contracting.
Auckland and Wellington experienced the sharpest job losses in the first quarter.
"The South Island is doing comparatively better on the jobs front, and Otago region leads the pack, with just a 0.2 percent decline in employment."
Strong US beef exports and inbound tourism is offset by the uncertainty around the impact of US president Donald Trump's tariffs on New Zealand and its other trading partners. Brunsdon said there "was an irony that as we become more reliant on them (the US market), that makes us more vulnerable".
"Connecting back to what's happening in the US, the only real certainty is uncertainty and so we think that could delay our full recovery by up to two years," he said.
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