Bay may escape nation's dairy slump

Hawke's Bay should weather the low-dairy-price storm well.

Hawke's Bay has enjoyed the fastest economic growth since the Global Financial Crisis and should weather the low-dairy-price storm engulfing the nation well, an economist says.

In the year to March 2015, the local economy grew an estimated 2.6 per cent, revealed Infometrics economist Benje Patterson.

It was "broad-based" growth, across many indicators. Traffic flows rose 2.4 per cent, the value of non-residential consents went up 45 per cent while car and commercial vehicles sales climbed 16 per cent and 3.8 per cent respectively, he said.

There was also a 4.1 per cent increase in guest nights recorded by accommodation providers.

"The outlook for Hawke's Bay's economy is looking good, with the lower New Zealand dollar set to boost returns for meat and fruit exports, as well as boost the purchasing power of international visitors to the region.

"The lower interest rate outlook will also free up money in households' and businesses' budgets."

Improving apple returns are increasingly making their way into the region's economy.

Mr Apple reported export-grade volumes for 2015 were about 13 per cent ahead of forecasts as were returns per carton, thanks to premium-fruit sales to Asia. Mr Patterson said improving economic conditions were beginning to show in the region's labour market.

The unemployment rate averaged 3.2 per cent over the March 2015 year, compared with a peak of closer to 6 per cent in 2011.

Falling unemployment was reflected in lower numbers of job seeker beneficiaries. Confidence had fallen throughout the country with dairy prices at their lowest level in more than 11 years, but Hawke's Bay has the country's least amount of dairy.

There was a positive net international migration inflow of 287 migrants into Hawke's Bay in the March 2015 year, compared with average annual outflows of 484 people per annum over the past decade. The inflow looks set to increase.

Last week the Government announced proposed changes to Immigration New Zealand's points system, giving more weight to people settling outside main centres.

Business Hawke's Bay CEO Susan White said the increase in employment showed business confidence was up.

As well as tourism and pipfruit increasing employee numbers, so were some of the region's manufacturers.

"The increase in job opportunities is a reflection of businesses looking to grow and that's the greatest news for Hawke's Bay," she said.

Labour's Jobs and Growth Caucus committee members were in town yesterday.

MP Clayton Cosgrove said lifting the number of RSE workers to prevent unpicked apples had to be balanced with increased employment for New Zealanders.

He was Labour's Minister of Immigration when the temporary work permit RSE scheme was introduced.

"RSE's objective was to complement the shortages of local work forces," he said.

"If you have six per cent unemployment you have to ask what the Government is doing to prepare those people for businesses like this, before you start increasing offshore. Six per cent is a big number.

"It should be New Zealanders first, otherwise they are a burden on the taxpayer."