The Bay of Plenty economy is performing strongly off the back of several sectors. Photo / Supplied
The Bay of Plenty economy is performing strongly off the back of several sectors. Photo / Supplied
The Bay of Plenty is continuing to punch above its weight economically as kiwifruit, forestry, exports and construction remain strong.
Westpac's June regional roundup shows a bright outlook and business leaders say although there will be challenges ahead, including ongoing labour shortages, the pros outweighed the cons.
The report highlightedthe horticulture sector and increased volumes of kiwifruit alongside demand for logs that had seen a price jump of 20 per cent, as well more residential building consents.
Industry economist Paul Clark, one of contributing authors, said he expected the Bay of Plenty would perform strongly over the coming year but gains were likely to slow compared to last year.
The region would also benefit from a larger kiwifruit harvest and log prices could get a further leg up from a fast-growing Chinese economy and a drop in transport costs once the supply chains begin to normalise.
Residential construction activity should also remain elevated.
New Zealand Kiwifruit Growers Inc chief executive Colin Bond said while the industry remains in a very positive position with continued strong demand and this year's harvest expected to overtake last year's record - labour remains a big challenge.
New Zealand Kiwifruit Growers Inc chief exectuive Colin Bond. Photo / Supplied
Employers were increasingly concerned about filling positions both after harvest as well as into next year, he said.
Border closures, which restricted the amount of RSE and other visa holders, meant despite running the largest recruitment campaign in history there was ongoing pressure.
On the bright side, kiwifruit production was expected to jump from 150 million trays in 2020 to 190m trays in 2027 and the kiwifruit industry's global revenue was expected to jump from more than $3.4 billion in 2020 to $6b by 2030.
The industry also contributed $1.5b to the Bay of Plenty in 2020.
Hancock Forest Management NZ Ltd general manager Kerry Ellem said the industry at large was very positive and in a good space.
They were mindful of congestion issues that had meant high shipping rates, not only in New Zealand, but in ports in China.
''Whilst the prices are very strong and the market is solid at this point in time the congestion does add additional freight and shipping costs.''
In general, the report was reflective of what Hancock was seeing in the market and the domestic demand was also very strong due to construction.
Tauranga City Council building services manager Steve Pearce so far this financial year from July 2020 to May 2021 it had issued 980 building consents for new residential dwellings.
That amounted to 1181 new residential units at a value of $454.4m.
''While we don't have the June figures yet, this is on track to being greater than last year where a total of 1214 units were consented for a total value of $445.7m.''
Overall Pearce said the value of consented building work was significantly higher and had reached $975m so far this year compared to $722m last year.
Meanwhile, figures from the Rotorua Lakes Council reveal it issued 234 consents to May this year compared to 149 over the same timeframes in 2020.
A Port of Tauranga spokeswoman said the export season was going well.
''The dairy export season is expected to remain strong through to June and kiwifruit volumes are expected to be greater than last season.''
Log export volumes were up considerably compared to last year due to high international demand and prices. This was despite ongoing supply chain disruption around the world, causing shipping delays and container shortages in some places, she said.
''We're just about to update the economic impact figures through an independent consultant, but last time they looked at the numbers [back in 2016] they estimated the port was responsible for just under half of Bay of Plenty regional GDP and almost 150,000 jobs nationwide.''
Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / NZME
Tauranga Chamber of Commerce chief executive Matt Cowley said we were still down on pre-Covid levels of GDP.
''We are fortunate that our economy is not as reliant on international tourism and our long-term population trend continues. We are also lucky to have a strong primary sector working with New Zealand's best port to get our exports to overseas markets.''
Strong regions had more choices for residents to live fulfilling lives – such as careers, recreation, schools, shops and volunteering, he said.
Priority One chief executive Nigel Tutt. Photo / NZME
Priority One chief executive Nigel Tutt said the region was outperforming most others on pretty much everything you can measure.
Unemployment was back to pre-pandemic levels and most export sectors were going particularly well and that included manufacturing.
''So that is great to see from a business point of view. We recently did a business survey and businesses were very optimistic about the future.''
Tutt expected the world economy to get stronger and New Zealand was in a good place to export more.
"One challenge could be getting enough workers and we could see a brain drain to Australia and with borders shut it was hard to get the right type of talent.
''So that will affect all parts of the economy. That will be a bit of a challenge for us to get everyone from teachers to nurses to accountants and truck drivers.''
