Strong labour market boosts Otago economy - ANZ

Otago’s economy has not only bounced back from recent downturns, it is outpacing the rest of the country, a new report shows.

The ANZ Otago Regional Spotlight Report highlights the role the region’s low Jobseeker numbers and strong labour market have played.

With Jobseeker Support at 3.4 per cent, Otago boasts the lowest rate in the country, half that of other regions. Queenstown-Lakes and Central Otago have also seen strong business growth, up 40 per cent and 27 per cent respectively. The region leads in new dwelling consents, reflecting strong population growth and investor confidence and export value has nearly tripled since 2002, reaching $3.14 billion.

“The regions are leading our economic recovery and Otago is the envy of many,” said Lorraine Mapu, ANZ NZ’s Managing Director of Business and Agri. “Its success shows what is possible when a region builds on its strengths and diversifies into high-value sectors such as tourism, horticulture and knowledge services.

“Through Covid, Otago appears to have been shielded from much of the impact felt by the rest of the country; employment held, business resilience underpinned strong growth, and the move away from traditional agriculture to a wider mix of food products and industries helped maintain solid growth in export values," Mapu said.

“When you look at things such as retail spend and the number of businesses starting up, confidence is starting to return, and job security is an important part of this.”

Mapu said ANZ NZ’s own data also showed encouraging signs.

In the last year ANZ has seen strong growth in business lending in the south of the South Island (South Canterbury, Otago and Southland), especially in small business lending (+5%) and commercial lending (+19%).

“This data supports what we have seen over the years: many New Zealand businesses with humble beginnings have the potential to grow into large enterprises,” Mapu said. “Today’s start-up could well become tomorrow’s global success.”

Having banked Cromwell-based cherry grower 45 South from its early days to now being one of the country’s largest growers, packers and exporters, Mapu said the success of the region can create its own challenges.

With high employment rates, the difficulty of finding workers has forced businesses to adopt new technology and innovate. 45 South has done this by piloting the use of autonomous vehicles for mowing, weed spraying and harvest logistics.

It has also invested in high-tech graders to enhance the quality of the fruit it sends overseas, thereby increasing its value.

“By capturing new opportunities in high-value food production, 45 South has helped transform Otago’s fruit export sector from a modest contributor into a major export pillar of the region’s economy,” said Mapu.

Fruit exports from Otago, worth $517m last year, have played an important role in growing the region’s export earnings. These have tripled since the early 2000s (worth $3.14 billion in 2024).

“The region’s diversification into high-value sectors creates a blueprint for the rest of the country and shows us what we need to do if we are to achieve the government’s target to double export values by 2034,” said Mapu.

The strength and success of Otago’s economy have also created challenges. This has been especially evident in Queenstown-Lakes, where rapid population growth and tourism numbers have put pressure on infrastructure.

The population of Queenstown-Lakes grew from 14,840 in 1996 to 52,430 by June 2024—a 353 per cent increase.

“This rapid growth has come with its own challenges, especially in terms of the homes and infrastructure needed to support it,” said Mapu.

While Otago as a whole saw the highest new dwelling consenting rate in New Zealand, at 10.25 per thousand people, in Queenstown-Lakes it was almost twice that, at 19.1.

“In contrast with many other parts of the country, in the last year we have seen a lot of commercial and residential buildings going up in the area, which has been a real boost to the local economy.”

“We can see how the regions are leading the country’s economic recovery and Otago is playing a core role,” said Mapu. “From this it is clear that we must continue to build on our strengths, diversify our industries into high-value sectors, and be prepared to invest in our productive sectors for the long term.”

Key report findings include:

• Otago earned $3.14 billion in exports in 2024—triple that of the early 2000s—highlighting the region’s steady economic expansion.
• Otago’s largest export earners were dairy ($933m) and meat ($787m), but fruit exports saw the largest growth—increasing sixfold since 2002—now worth $517m per year.
• Since 2018 there has been strong business growth in Queenstown-Lakes (+40%), Central Otago (+27%) and Dunedin (+20%).
• Otago is also a standout when it comes to the labour market—with the lowest Jobseeker Support rate (3.4%) in the country, half that of other regions.
• Highest new dwelling consenting rate in New Zealand (10.25 per thousand people).
• Otago was a clear leader in regional retail sales growth for the June 2025 quarter (+2.6% on the March 2025 quarter).