6 Dec 2018

Westpac predicts slowing economy next year

1:35 pm on 6 December 2018

Economic conditions have shifted around the regions with a distinct improvement in Auckland and Waikato, while Canterbury remains in the doldrums.

Westpac Bank HQ in Sydney. Generic.

Photo: AFP

The Westpac Regional Roundup for the September quarter anticipates the gap between the most negative and postive regions will begin to narrow, with regions closest to Auckland expected to pick up the most.

Westpac chief economist Dominick Stephens said the swing back toward consumer spending and rising house prices would benefit northern regions the most, while Wellington was expected to get a further boost from government spending.

He said economic conditions were expected to remain strong in most rural regions but were not expected to improve as much over the coming year, with more government spending and the Provincial Growth Fund, offset by a drop in farmgate milk prices.

"Beyond next year, we expect the national economy to slow again, partly as a result of population growth," he said.

"This slowdown is likely to be felt more acutely in the lower North Island and Otago where a burst of population growth has been a major driver of economic buoyancy in recent years."