Bay's future looks bright as economy picks up pace

Mark Lister from Craigs Investment Partners says Tauranga's economy is improving but still lagging behind Auckland. Photo / Joel Ford

The Bay's economic future looks bright with the region's economy growing faster than that in Auckland and the Waikato.

A new report tracking the country's long-term progress shows the country's economy is one of its most promising areas of growth, but that blanket policies were holding regional New Zealand back.

The New Zealand by Numbers report was put together by The New Zealand Initiative, an association of business leaders as well as a research institute, to help "dispel myths" ahead of the upcoming election.

The Bay of Plenty region's GDP was $11.2 billion in 2013 - a 25.3 per cent increase from 2007. This compares with Auckland's $74.7 billion, which is a 22.6 per cent increase from 2007 and Waikato's $17.9 billion, which is a 22.1 per cent increase.

The Bay's top industries are manufacturing, forestry and professional.

Head of research at Craigs Investment Partners in Tauranga, Mark Lister, said a halt in local construction and trade following the global financial crisis was improving.

"We're starting to see the first signs of things turning around, but they're in the early days.

"[Tauranga's] future is bright because of a whole range of reasons. We've got the best climate in the country, the best beach, we've got the best port ... we're not isolated, we're close to Auckland and Hamilton and it's a great place to live."

However, he said, while Auckland and Christchurch were firing on all cylinders, the rest of New Zealand was more subdued. "We are in recovery as a country but some places are certainly doing better than others." Tauranga's economy could benefit from some of Auckland's strength, Mr Lister said.

"Auckland house prices over the last five years are up 50 per cent, and Tauranga house prices haven't even kept pace with inflation. Things are a little bit lethargic here compared to what we're seeing in the big cities."

Further economic growth would bring opportunities for small businesses, more jobs and better wages, Mr Lister said.

Tauranga Chamber of Commerce chief executive Dave Burnett said he was not surprised the GDP increase was so large.

"Some of the smaller regions are struggling a little bit. I think down here we are an exception to the rule because of what we've got down here with the port - one of the biggest in New Zealand, we've got great roading infrastructure, we've got the Kiwifruit coming back on stream, we've got the tertiary precinct being signed off in terms of the funding," he said.

"We're seeing a lot of business confidence coming into the region ..."

Executive director of The New Zealand Initiative, Dr Oliver Hartwich, said New Zealanders lived in a growing economy and export growth to China was the "biggest economic story" of the last decade.

"We are going to be what Australia was in the last 20 years - the main beneficiary of the Asian upswing."

Dr Hartwich said New Zealand had recovered remarkably well from the global financial crisis but the overwhelming centralisation of policy-making was working against our regional economies.

"You cannot have a one-size-fits-all policy for the whole country, not even for a small country like New Zealand. We should allow [the regions] to experiment with different ways of doing things."

Meanwhile, recently released New Zealand Institute of Economic Research figures suggest New Zealand's once-prosperous provinces are falling into the economic doldrums.

NZIER principal economist Shamubeel Eaqub said some parts of regional New Zealand were becoming economic "zombie towns".