The agricultural sector is expected to improve in the coming year. File photo. Photo: Deep South Sheep and Beef
The lower South Island has once again delivered the strongest economic results in the country, with the agricultural sector set to deliver further growth.
The ASB's third quarter (Q3) regional economic scoreboard gives top marks to Otago, followed by Canterbury and Southland.
"Overall, our scoreboards have shown that 2024 has been a mixed bag, with a subdued housing market, an increase in unemployment, easing of net migration inflows and tourism starting to level off," ASB chief economist Nick Tuffley said.
"We forecast a brighter outlook in 2025 for sectors like construction and retail and remain cautiously optimistic about seeing improvements across the board as the year progresses."
He said the agricultural sector was also expected to improve in the coming year.
"One thing to watch out for is going to be an agricultural sector, because we are seeing that do fairly well. And the dairy story has got increasingly positive in a very short space of time."
The West Coast's economy made the largest jump in Q3 - rising eight spots to fifth place in the national rankings of 16 regions.
On the downside, Northland dropped eight spots to land in 13th position, with Wellington second to last, and Nelson at the bottom of the list.
Auckland continued to drop further in the rankings to 14th place, although the region was expected to see some improvement in the second half of 2025.
Tuffley said the overall state of New Zealand's economic growth in the third quarter remained weak, though the trend was heading towards better days in 2025.
"Inflationary pressures are continuing to ease, which has given the Reserve Bank more confidence in its monetary easing cycle," he said.
"We expect to see annual CPI inflation to remain contained in the Reserve Bank's target band. So, despite prevailing challenges, there is cause for optimism and for New Zealanders to start looking ahead to how they can thrive in '25."
He said house prices ware expected to continue to lift as buyer sentiment improved, as indicated by the latest ASB Housing Confidence survey.
Retail sales were also expected to recover in 2025.
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