Nationwide economic activity, excluding Canterbury, rose 0.2% in the March quarter, National Bank says

Nationwide economic activity fell 0.1% during the March quarter, the National Bank says in its latest Regional Trends report.

The bank says eight regions recorded a rise in economic activity during the March quarter, with six regions recording a drop. Unsurprisingly economic activity in Canterbury took a big hit from the February 22 Christchurch earthquake, resulting in that region’s largest quarterly drop in economic activity since the start of the National Bank series in 1975.

Overall, economic activity in the South Island dropped 1.7%, while the North Island recorded a 0.3% rise in activity. New Zealand, excluding Canterbury, recorded a 0.2% rise in economic activity. However, when compared with the previous quarter, year-on-year economic growth slowed across all regions.

At -0.2%, Northland recorded the lowest annual average rate of economic growth, slightly weaker than Canterbury’s -0.1% decline. In contrast, the West Coast and Otago had the equal top annual average rate of economic growth, rising 2.8% from a year earlier. The annual average rate of economic growth for New Zealand as whole was 1.2%, the National Bank said. At 1.4% the North Island had twice the rate of increase of the South Island's 0.7%.

"Not surprisingly, the Christchurch earthquake dented economic activity in the region, although some of the monthly indicators were beginning to recover prior to the event," the National Bank said. "Canterbury recorded the lowest level of consumer confidence in New Zealand, but the level of sentiment remains higher than during darkest period of the global financial crisis."

The bank said the number of house sales in Canterbury plummeted 26% from the December quarter and new car registrations dropped 15%. The level of surveyed employment and Paymark electronic sales volumes both fell 1%.