Two reports into the Bay of Plenty's economy shows the makeup of the region's economy is cooling, and forestry and tourism sectors are expected to bear the brunt.

But those at the front lines of those sectors say it's not so bad.

The KiwiBank's Regional Heat Map and Westpac's Regional Roundup have highlighted concerns in the Bay's economic forecast.

A slump in spending and guest nights were both signs the tourism industry was softening according to Westpac's Regional Roundup released yesterday .

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However, it was not all bad according to Kiwibank senior economist Jeremy Couchman.

The banks' regional analysis released last week showed the Bay of Plenty running hotter than Auckland.

"In contrast to Auckland, these regional neighbours have shown stout resilience in guest nights – encouraging for tourist meccas like Rotorua."

Tourism Bay of Plenty head of destination marketing Kath Low said a total spend of $1.09 billion in the year ending in August represented 7 per cent growth compared with the previous year in the coastal Bay of Plenty area.

"This is compared to the national visitor economy which experienced 3 per cent growth.

"The coastal Bay of Plenty saw 14 per cent growth in the international visitor market over the same period."

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Rotorua Economic Development, also known as Destination Rotorua, chief executive Michelle Templer said they tried to ensure there was no reliance of either the international or domestic market.

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"Annual visitor spend in Rotorua is at $830m which is still in growth of 1 per cent but not at the same levels we have seen in previous years," she said.

"Domestic visitor nights to the year-end of July 2019 grew 4 per cent which helped offset the drop in international guest nights."

Destination Rotorua chief executive Michelle Templer. Photo / File
Destination Rotorua chief executive Michelle Templer. Photo / File

Rotorua tourism operator Skyline said it had "definitely" experienced softening of international tourism.

"We believe this is due to a number of factors including a reduction in airline capacity, the increasing price of New Zealand as a destination and heightened competition from other international destinations," sales and marketing manager Andrew Aitken said.

The export-focused regions were still outperforming the big cities but the margin has narrowed and Westpac chief economist Dominick Stephens expects it will narrow further.

"We think that economic conditions are going to get worse before they get better, especially for regions with big exposures to tourism, dairy, forestry and manufacturing."

He said the Bay of Plenty had been affected by sharply lower log prices.

"With log prices falling sharply in June, harvesting activity in this major forestry and timber producing area has started to slow," Stephens said.

"Volumes through the port are likely to fall as a result."

Timberlands chief executive Robert Green said the impact on log prices affected different businesses differently.

Logging prices have dropped and the port is expecting log export volume to drop about one million tonnes. Photo / File
Logging prices have dropped and the port is expecting log export volume to drop about one million tonnes. Photo / File

Green said his business, which employed about 700 people, had experienced no job losses.

A Port of Tauranga spokeswoman said a drop from 7.1 million tonnes to 6 million tonnes of export log volume was expected to come by the end of the next financial year.

"It will definitely create an impact but you have to look at how it has increased in recent years, which is substantial. And log exports fluctuate a lot."

Chamber of Commerce chief executive Bryce Heard believes unless there are major structural changes there is nothing to worry about. Photo / File
Chamber of Commerce chief executive Bryce Heard believes unless there are major structural changes there is nothing to worry about. Photo / File

Rotorua Chamber of Commerce chief executive Bryce Heard said people needed to treat forecasts with caution.

"Unless there are some structural changes to create longer-term downturn, I wouldn't get too down in the dumps about it."

Tauranga Chamber of Commerce chief executive Matt Cowley was approached for comment but did not respond.