Latest / Best of Business / Jarrod Kerr: Kiwibank chief economist on the South Island's economy recovering quicker than the North's

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Jarrod Kerr: Kiwibank chief economist on the South Island's economy recovering quicker than the North's · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed Be
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  Speaker 2: So the regional economic divide appears to be widening, with
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  Speaker 2: the South Island pulling ahead of the North. Kee We
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  Speaker 2: Bank has released its annual Regional Note showing most showing
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  Speaker 2: the most economic activity of the regions across the country
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  Speaker 2: has lifted. However, the South Island continues to outperform the North,
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  Speaker 2: with the Tigo and Southland leading the way as the
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  Speaker 2: country's top performing regions. Kee We Bank chief economist Stared
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  Speaker 2: cur is with me. Now, good morning, Jarreed, Good morning.
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  Speaker 2: So it's good news for the South Island. What are
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  Speaker 2: we seeing down there? Why is it pulling ahead?
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  Speaker 3: Look, the South Island's doing well, not only the farming,
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  Speaker 3: but the tourism industry is picking up. We're getting back
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  Speaker 3: to the sorts of levels we saw prior to COVID,
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  Speaker 3: so that's really helping Otago for example. And there's a
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  Speaker 3: bit of a building boom going on in Southland. Strong
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  Speaker 3: down there.
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  Speaker 2: What about the rest of the South Island.
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  Speaker 3: So the rest of the South Island is doing okay,
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  Speaker 3: you know, they're recording sort of four five out of ten,
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  Speaker 3: which is not great, but it's much better than what
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  Speaker 3: we were last year.
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  Speaker 2: So that momentum in a tago in Southland. Do you
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  Speaker 2: expect that to continue?
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  Speaker 3: Yeah?
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  Speaker 1: I do.
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  Speaker 3: I do. I think farmers will continue to receive high
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  Speaker 3: prices for their meat and dairy in particular, and I
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  Speaker 3: do think the international tourist will continue to improve. You know,
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  Speaker 3: I think tourism's got a bit more upside to it,
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  Speaker 3: and then I think the rest of the economy will
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  Speaker 3: slowly recover into next year.
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  Speaker 2: Jared, what's going on in Taranaki, Northland and Gisbon they're
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  Speaker 2: going backwards? Is that a surprise?
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  Speaker 3: Yeah, good question. We looked at that and it was
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  Speaker 3: a surprise, particularly Taranaki, where we see, you know, a
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  Speaker 3: lot of their economies made up of farming and you
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  Speaker 3: know they're supposed to be doing really well, but employment
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  Speaker 3: in the region was down eight percent over the years.
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  Speaker 3: So it just shows you that even though some parts
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  Speaker 3: of the economy are doing well, other parts aren't, and
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  Speaker 3: you know, they're really struggling.
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  Speaker 2: Okay, So if we take a look at things on
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  Speaker 2: a you know, on a whole most regions have lifted.
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  Speaker 2: Is the tide turning.
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  Speaker 3: The tide is definitely turning, and that's because the Reserve
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  Speaker 3: Bank has been cutting into trates and that's slowly feeding
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  Speaker 3: through the economy. So the tide's turning. It's just the
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  Speaker 3: speed at which we're recovering from last year's recession, which
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  Speaker 3: was pretty deep, and it's not fast enough for me
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  Speaker 3: the way we're recovering. I think we need more stimulus.
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  Speaker 3: I think we need more policy support.
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  Speaker 2: What is the national score at the moment?
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  Speaker 3: National score is about three and a half four, which
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  Speaker 3: you know, well below average out of ten. We need
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  Speaker 3: to get that up. Yeah, sorry, out of ten, we
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  Speaker 3: need to get that up around six seven, So you know,
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  Speaker 3: that's better than the twos and threes that we were
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  Speaker 3: recording last year. But you know, we're not shooting the
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  Speaker 3: lights out. We're sort of crawling out of this recovery.
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  Speaker 2: Because we were all sort of told to hold on,
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  Speaker 2: you know, to twenty twenty five, survive to twenty five,
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  Speaker 2: but it's now looking like it's really going to be
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  Speaker 2: twenty twenty six before we see any significant improvement, would
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  Speaker 2: that be right?
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  Speaker 3: Yeah, unfortunately that is the case. So you're right, we're
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  Speaker 3: all saying, you know, it's just survive till twenty five.
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  Speaker 3: But you know, here we are halfway through twenty five
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  Speaker 3: and we're just not seeing the recovery that we had anticipated.
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  Speaker 3: So it is becoming a twenty twenty six story. Unfortunately,
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  Speaker 3: we are having to grind for that much longer. But
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  Speaker 3: I do see light at the end of the tunnel,
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  Speaker 3: and we are optimistic that things will improve next year.
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  Speaker 2: How are we looking against the likes of Australia.
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  Speaker 3: You know what we're lagging behind. Australia was, you know,
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  Speaker 3: a lot less heavy handed during the inflation period we
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  Speaker 3: had a couple of years ago, whereas our central bank
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  Speaker 3: was very heavy handed and openly orchestrated a recession to
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  Speaker 3: get inflation down. The Aussies let things run. And you know,
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  Speaker 3: they're sitting there with an unemployment rate of a little
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  Speaker 3: over four percent, whereas our unemployment rates over five percent.
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  Speaker 3: So they have a tighter labor market, they have a
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  Speaker 3: better running economy, and that's why we're losing Kiwi across
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  Speaker 3: the across the ditch.
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  Speaker 2: Thanks so much, Jared, I think we'll all hold on
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  Speaker 2: to you a little bit of light at the end
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  Speaker 2: of the tunnel. Thank you so much. That was Kiwi
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  Speaker 2: Bank Chief economist Jared Kerr.
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