Tourism, primary sector behind strong Otago economy
Figures released yesterday by Statistics New Zealand show Otago had the lowest rate of unemployment in the country in the past quarter.
Unemployment was 3% in Otago, compared with an average rate of 5.2% across the country.
The average national rate of unemployment was 5.1% in the March 2025 quarter and 4.7% in the June 2024 quarter.
In contrast, Otago's level of unemployment was only slightly up on the March quarter's 2.7%, and the same as it was at June 2024.
Infometrics chief economist Brad Olsen attributed Otago's performance to a strong tourism economy and buoyant primary industries sector.
"The fact that the likes of international arrivals into Queenstown are sitting at 150%-160% of pre-pandemic levels ... better than any other international airport in the country — all of that is a real gain.
"We know as well that the primary sector more generally is helping and that's going to be supporting the likes of beef, dairy, meat more generally, horticulture."
The number of people employed in Otago remained steady at 154,700 compared with the previous quarter of 155,700. In comparison, the number of people employed in Auckland dropped from 994,000 to 984,000.
There was enough of a shift in the Otago economy to imply "people think that there are odds-on better opportunities than a year ago in Otago", Mr Olsen said.
Business South chief executive Mike Collins said the figures did not totally surprise him, although sometimes Statistics New Zealand information was a bit volatile due to the small sample size.
"We're certainly seeing a little more light."
Things had quietened down after the period of "crazy demand" for skilled labour, post-Covid, he said.
Recruitment had been replaced for employers by more bread-and-butter concerns such as consumer spending and consumer confidence.
His organisation was keen to get even more data so they could provide more accurate results and get a better feeling for local trends.
"We've always been trying to work out what settings could change to really stimulate more consumer confidence and spend."
The ODT has recently also reported Otago's small businesses were finding a way to increase sales while North Island centres went backwards.
A small business report by accounting software company Xero showed sales in Wellington and Auckland were down, while Otago was leading the pack with sales up 3.9% year-on-year for the June quarter.
Strong commodity prices and soaring food and fibre exports helped power Otago to a strong start to 2025, the province taking the third top spot in ASB's Regional Economic Scoreboard for the March quarter.
Mr Olsen said Otago was in the right position economically.
"Given where things are sitting at the moment ... you'd be hoping that over time that better labour market then also translates through into spending and confidence, leading to investment to keep momentum going."
matthew.littlewood@odt.co.nz
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