27 Apr 2012

Index shows improvement in South Island companies

8:20 am on 27 April 2012

An index tracking the performance of South Island-based companies has edged up again, suggesting the economic recovery is gaining momentum.

The Deloitte South Island Index tracks 30 listed companies based in the South Island, including Ryman Healthcare, Kathmandu and Heartland New Zealand.

The index's market capitalisation rose by almost $324 million, or 7.1%, in the first three months of the year, following a 0.5% gain in the previous quarter.

Deloitte's corporate finance partner Paul Munro says the continued improvement is cause for cautious optimism, and the index appears to be in a better position than it was a year ago.

But on an annual basis, the index fell 4.8% in the year to March, compared to a 2% increase in the NZX50 and a 10.3% fall in the ASX across the Tasman.

Mr Munro says the annual fall reflects the malaise afflicting the wider economy, brought about by problems associated with the reconstruction effort in Christchurch, the European debt crisis, and the downgrade of New Zealand's long term credit rating.