Space history was made yesterday from a small northern Hawke's Bay site, as the first rocket was launched from New Zealand.

About 4.20pm Rocket Lab's Electron vehicle lifted off from Launch Complex 1 at the tip of Mahia Peninsula, reaching space at 4.23pm.

As well as being the first successful test launch of the rocket, it was the first orbital-class rocket launched from a private launch site in the world - witnessed by a lucky crowd of spectators on a beach near Nuhaka.

The eager few who gathered at the Blucks Pit viewing site, constructed by the Wairoa District Council, included local residents, council staff, and tourists who had stopped off after seeing the road signs.

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Most had been waiting on the beach since 1pm - the start of the launch window - and with poor weather conditions and failing light, hopes were fading.

The previous three planned launches had been scrubbed - all due to unfavourable weather conditions.

But yesterday the wait was worth it - cheers erupted as a bright light flashed up above Mahia Peninsula just after 4.20pm, which rose slowly into the sky with a cloud of smoke below it, visible for less than a minute before disappearing into cloud.

Spectators said they felt privileged to have witnessed the first rocket launch from New Zealand.

Gisborne residents Sherre Drummond and Ross Jensen said they were pleased they had managed to witness the moment - they had stopped off at nearby Morere Café, when they were told the rocket was expected to launch soon.

"We'd been waiting for weeks, we were hoping we'd catch it," Ms Drummond said. "But we'd just put it off and said 'It's not going today, its overcast'."

"There's just 22 of us who saw it, it's amazing," Mr Jensen said. "[I feel] privileged for a start, we were Johnny on the spot, we're here at the right time, right moment."

Ms Drummond said the launch "reminded me of those iconic moments in life where you'll always remember where you were".

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They weren't the only spectators to arrive just in time - Lisa Denny of Nuhaka had closed up her café early, and arrived at the site just 15 minutes before the rocket launched.

"It's pretty special. It's fantastic for New Zealand," she said.

Others had been staking out the site - like Wellington resident Doug Brennan who had been there waiting since Sunday for the rocket- which his son Sean helped build - to lift off.

"A lot of people said this thing started 10 years ago, but for a lot of these [young] guys it started when they were born, playing water rockets as kids," he said.

His son, a 28-year-old megatronics engineer, had helped design and build the rocket, and was stationed at the launch site during the event.

"I'm very happy for him. He's put a lot of work into it, he's studied for a long time at university to figure it all out," he said. "[I'm] very proud of him."

Yesterday Rocket Lab CEO Peter Beck said although the flight went through the process correctly, the 17m Electron rocket had not managed to reach orbit.

"We'll be investigating why, however reaching space in our first test puts us in an incredibly strong position to accelerate the commercial phase of our programme, deliver our customers to orbit and make space open for business".

The company's engineers in New Zealand and the United States would work through the 25,000 data channels collected - the results would inform measures taken to optimise the vehicle.

Yesterday's launch was the first of three test flights scheduled for this year.

At full production, Rocket Lab expects to launch more than 50 times a year, and is regulated to launch up to 120 times a year - last year there were 22 launches from the United States, and 82 internationally.

This means the launch was also "fantastic news" for the Wairoa District Council, who initially lobbied for the Auckland-based company to establish the launch site here.

Wairoa Mayor Craig Little said the successful test had been great news for rocket lab, and the district.

He noted the scrubbed launches had also been good for the town, as it meant visitors had stayed longer.

"The key for us is to make Wairoa more exciting so they have got more to do ... to keep them in Wairoa rather than have them heading out of town."

Council CEO Fergus Power said he was proud of the team who had helped contribute to yesterday's outcome - especially those who had "moved mountains" to ensure Rocket Lab understood of all potential launch sites. "Wairoa District was the obvious choice, open for business, and unflaggingly supportive."

Although they discouraged spectators during the test phase, Mr Power said they had been "pleasantly surprised" at the numbers visiting the district.

"Once commercial operations commence, we will be actively encouraging and supporting space enthusiasts in their adventures on 'Space Coast New Zealand'," he said.

"Being the home of space operations in New Zealand is hugely exciting for the Wairoa district and Hawke's Bay, and we look forward to Rocket Lab's continuing success."

Napier MP Stuart Nash said he thought yesterday "will be fantastic for Wairoa but obviously it will be brilliant for New Zealand.

"This is the first hurdle. If we get to a stage where [Rocket Lab] has 40 or 50 rockets launched a year, then it will be transformational, it really will."

Mr Nash said he thought Rocket Lab's success would be a "boost for Wairoa" from creating tourism opportunities, developing a need for infrastructure, and potentially new business which could create a ripple effect of benefit.

"This won't happen overnight," he said, adding if Rocket Lab's commercial venture was successful "then I think Wairoa will be a different town in 10 years than it is now".

Electron is a 17m tall rocket, designed to carry satellites into space at a fraction of the normal cost.

Rocket Lab's commercial phase will see Electron fly already-signed customers including NASA, Spire, Planet, Moon Express and Spaceflight.