Households, businesses facing tough economic times – survey

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According to a survey by Westpac, a cold front has settled in the economy.

The bank's latest round-up showed all regional economies as freezing, cold or cold, with households and businesses describing dire conditions.

Primary sector-dominated areas such as Northland, the upper South Island, the Waikato and the West Coast are described as 'frozen' with very low ratings, while Wellington is shivering in the cold as it faces the reality of public sector job cuts.

No region received moderate, warm or hot medium or high ratings.

Westpac Senior Economist Satish Ranchod said the best-performing regions are service-oriented, especially tourism.

„At the same time, in many of our regions with strong agricultural backbones, the combination of drought and weakness in export prices is weighing on farm incomes and costs.

„This generally flows to softer demand in regional economies,” he said.

Services-oriented Auckland and Queenstown were the bright spots, but even there, it wasn't all positive news.

„Increasing population growth is helping to support demand in the face of other headwinds. The recovery in international tourism is also providing a welcome boost to spending in the hospitality sector.

„That recovery in international tourist numbers has also been a boon for Otago, with many businesses in Queenstown reporting solid demand as numbers continue to rise from high-spending markets such as the US.

Conditions were mixed in the regions, however, Ranchot said, with weak spending by locals.

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