ASB’s Regional Economic Scoreboard: Canterbury tops the rankings as the region that has it all

Canterbury has reclaimed pole position in ASB's latest Regional Economic Scoreboard, underpinned by strong consumer spending, population growth, a resilient labour market and a firm housing sector.

The region returned to first place in the rankings in the second quarter of 2026 after taking second place for Q1, while Taranaki recorded one of the strongest turnarounds in the country, surging from second-last to second place. Auckland slipped to sixth place as weakness in the housing market continued to weigh on the region's performance.

The region that’s firing on all cylinders

ASB’s Acting Chief Economist Kim Mundy says "Canterbury has the full package right now. Households are spending, businesses are investing, the labour market remains resilient and strong dairy returns are providing an additional boost to the economy.”

Core retail sales in Canterbury grew 8.8% year-on-year, the strongest result in the country.

“What’s interesting about the retail data is that we can see there’s been a 4% year-on-year decline in tourism spending in the region, suggesting the strong retail sales in Q2 was driven by locals rather than visitors.”

Canterbury’s labour market held up well in Q2, with employment up 2.6% year-on-year and one of the lowest national rates of unemployment at 3.6%. The region’s housing market also remained strong, with house prices rising 3.3% annually. High dairy prices boosted export returns, while continued population growth and major events supported by its new stadium helped support economic activity during the quarter.

Taranaki emerges as the dark horse of Q2

Taranaki delivered the biggest surprise of the quarter, climbing to second place in the rankings after sitting near the bottom last quarter.

Mundy says “Taranaki recorded one of the country's strongest rebounds, benefiting from strong dairy and meat sector performance, supported by the Fonterra capital return payout and favourable export conditions. These strengths likely offset some weakness in the oil and gas sector.”

Employment growth was among the strongest nationally, construction activity surged 47.1% year-on-year and new vehicle registrations increased 21.6%.

Southland continues to punch above its weight

There were plenty of bright spots underpinning Southland's result in third place. Strong house price growth, a surge in new car registrations, and solid retail sales growth all contributed to the region's rise in the rankings.

Mundy says "While housing markets remained subdued across much of New Zealand, Southland's housing market continued to show remarkable resilience, with annual growth in both house prices and house sales remaining the strongest in the country.”

Strong dairy and meat exports, alongside Fonterra's capital return payout, continued to support the regional economy. Retail sales rose around 7% over the past year, while new car registrations increased sharply.

"The region's Achilles heel has been its softening labour market, with employment falling 2.9% annually. However, agriculture remains a significant contributor to the local economy and is currently performing strongly, helping offset some of the weakness in the jobs market."

Auckland’s below-average performance defined by sluggish housing market

The City of Sails slipped to sixth place, underperforming the national average across most indicators in ASB's Q2 Regional Economic Scoreboard.

Mundy says, “Auckland's housing market remained a key drag on performance, with both house prices and sales down significantly on a year ago. Buyers continued to hold the upper hand as listings remained high and demand subdued.”

While new car registrations rose strongly, partly reflecting demand for electric vehicles, and building consents showed healthy growth, other regions recorded even stronger gains in these areas.

"Population growth and tourism are providing some support to the region, but Auckland's economy continues to contend with cost-of-living pressures, interest rates trending higher, a soft labour market and ongoing uncertainty. While these challenges may weigh on activity in the near term, the region remains well positioned to benefit as economic conditions gradually improve."

Exports buck the trend as economy slows

Mundy says the subdued economic backdrop is expected to continue, with Middle East tensions adding to uncertainty.

"We expect further 25 basis point hikes from the RBNZ in October and December, taking the OCR to 3.25%. Higher interest rates are likely to weigh on consumer spending and delay a broader housing market recovery. While the outlook remains data-dependent, inflation is expected to stay close to 4% through the rest of 2026 and labour market conditions are likely to remain soft.”

Despite a slowing economy, New Zealand's export sector remained resilient in Q2. Export volumes rose 6.4% over the quarter and 10% on a year ago, while export prices increased 3.5%. Dairy, meat and wool all posted solid gains, helping offset the surge in import prices due to the impact of the Middle East conflict.

"Exports look set to remain a key source of support for the economy, underpinned by firm commodity prices and a weak New Zealand dollar. For now, New Zealand's two-speed economy appears likely to persist." says Mundy.

The full report is here.

About the ASB Regional Economic Scoreboard

The ASB Regional Economic Scoreboard takes the latest quarterly regional statistics and ranks the economic performance of New Zealand’s 16 Regional Council areas. The fastest growing regions gain the highest ratings, and a good performance by the national economy raises the ratings of all regions. Ratings are updated every three months, and are based on 11 measures, including employment, construction, retail trade, and house prices.