New Zealand regional economic confidence rose in the December quarter, with an upswing in sentiment among dairy farmers and positivity in urban centres.

The Westpac McDermott Miller Regional Economic Confidence Survey showed increased optimism across all regions expect Northland in the final three months of 2015.

Westpac industry economist David Norman said they had expected a bounce in sentiment after it floundered in September when dairy farmers faced low milk prices from Fonterra, but in some cases the rise in optimism was "surprisingly large."

The survey balances households expecting good or bad economic times in their region over the coming year as a percentage of households in that region, with a positive number indicating more households have a good economic outlook.

It was conduced from Dec. 1 to Dec. 11, and sampled 1,565 households.

Dairy-exposed regions reported increased optimism after Fonterra's payout was revised up to $4.60 per kilogram of milk solids, from $3.85/kgMS in September.

Southland's mood improved 52 percentage points to a net 16 per cent of respondents positive about the region's economic outlook. Taranaki/Manawatu-Whanganui rose 24 percentage points to net 9 per cent positive, Nelson/Marlborough/West Coast was up 10 points to net 26 per cent positive, and Waikato moved up 5 points to net 4 per cent positive.

Urban centres also became increasingly upbeat, with Canterbury up 1.6 percentage points to 25 per cent, Auckland rising 8 points to 21 per cent, and Wellington gaining 12 points to 28 per cent net optimism.

The most optimistic region was Bay of Plenty, with a net 41 per cent of respondents upbeat in December. Bay of Plenty has been the most positive region for the last three quarters, which Westpac's Norman ascribed to the resurgent kiwifruit industry, strong house price growth, particularly in Tauranga, and falling unemployment.

Otago saw the biggest upswing in confidence, with a net 37 per cent of respondents optimistic compared with a net 4 per cent who were pessimistic when the survey was last conducted in September. This was down to increasing property values and more tourism in the Queenstown-Lakes area, Norman said, with guest nights and house prices up.

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