The Otago economy received a double setback yesterday with the release of two separate surveys which showed regional confidence taking another sharp knock and salaries falling in the first six months of the year.
The Westpac regional economic confidence survey showed Otago's confidence falling from -9 points in March to -22 in June, a 13-point fall and the second highest decline after the 28-point drop experienced by Waikato.
Westpac senior economist Felix Delbruck said regional confidence in Otago was now the third-lowest in the country with a net -22% of households expecting mainly bad times over the coming year.
"Dunedin's housing market appears to have been losing some steam this year and we suspect the region's tourism and agricultural sectors are feeling the impact from weaker conditions overseas."
Government cutbacks might also be affecting the health and education sectors in the region, he said.
Southland had an 11-point fall but remains well in positive territory at 32 points in June, down from 43 in March.
Canterbury had a 17-point rise to finish at 25 in June, up from eight in March.
Mr Delbruck said the downturn in export markets had seen economic confidence in Southland come off from its dizzy December heights. In December, a net 68% of households were upbeat but now only 32% felt optimistic.
However, economic optimism in the region was still by far the strongest in the country, with only Canterbury coming close.
Economic confidence in Canterbury was now the highest since the February 2011 earthquake, he said.
On balance, 25% of households now expected good times for the region in the year ahead, making the region the second most optimistic region in the country.
While parts of the economy continued to struggle, repair and reconstruction work had started, the market for undamaged homes continued to improve and retail spending was almost back to pre-earthquake levels, he said.
The other bad news came in a Seek survey which showed Canterbury salaries rose 3.6% in the first six months of the year, driving the average pay packet for Cantabrians up more than $2000 to $66,415.
In Otago, salaries fell in the same period by 1.6% to an average of $63,627, behind Southland which grew by 7.6% to $67,469.
The West Coast, a beneficiary of mining, resources and energy industries, recorded the highest average salary in New Zealand of $93,515, even with a 2.6% fall in the six months.
The national average is $71,731.
Regional breakdown
Otago
Confidence: down 13 points to -22
Salaries: down 1.6% to $63,627
Southland
Confidence: down 11 points to 32
Salaries: up 7.6% to $67,469
Canterbury
Confidence: up 17 points to 25
Salaries: up 3.6% to $66,415
