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Hawke’s Bay’s economic future will rely heavily on six main industries with “the greatest potential to drive value and employment growth” in the region, a new report has found.
Tourism was left off the top-six list but is among four further industries included in the report with “potential” to be an “important future generator” for jobs and economic growth.
Two reports were released publicly on Thursday, providing a snapshot of the Hawke’s Bay economy and identifying major challenges and opportunities for growth.
The main 130-page report, Understanding Opportunities and Challenges for the Hawke’s Bay Economy, stated six industries “were identified as having the greatest potential to drive value and employment growth in the Hawke’s Bay”.
The report detailed how much each industry was worth to the economy, how many jobs it currently had and how many jobs it could create (or lose) in the next five years.
“This study gives the region a common understanding of our challenges and opportunities,” HBREDA chief executive Lucy Laitinen said.
Each industry was evaluated according to a list of criteria – from the scale of the industry to potential for future growth and creation of new jobs.
“The reason why tourism wasn’t rated as highly as other industries in this analysis is because it had a decline in jobs,” Laitinen said.
“Productivity in the industry is also relatively low and lower than the regional average.
The reports have taken a close look at Hawke’s Bay's economy. Photo / Warren Buckland
“The international component of spend is also relatively low.
“Covid and the cyclone have not helped with this, clearly.
“The good news is there is a lot of room to grow and add value in this industry but we need to address the ‘cross cutting’ themes that have been raised in the report such as skills shortages and connectivity challenges.
“We believe there is a lot of potential for this industry and that it should be supported to reach that potential.”
Almost 70 interviews were conducted with local businesses, councils, post-settlement governance entities (PSGEs), and other groups as part of the research.
The report also stated State Highway 2 Napier-Wairoa Rd has “a lack of resilience” and the region would benefit from further Government funding on that major route.
Not all of the six key industries highlighted in the report are booming, with plenty of their own challenges.
For example, the farming and meat processing industry, which employs almost 6000 people in Hawke’s Bay, is facing plenty of challenges, the report highlighted.
“China has been a major market for New Zealand meat but the China economy has been weak, resulting in low demand, an oversupply of beef and lamb internationally, and low prices,” the report read.
“This has had downstream effects on the industry.”
Cyclone Gabrielle also damaged farms and that, combined with land use changes such as conversions of farmland to forestry incentivised through the ETS, has also contributed to a reduction in stock numbers, the report stated.
“Processing is becoming uneconomic for larger-scale meat processors that require a minimum throughput to cover fixed costs.
“Over-capacity in traditional meat processing is a nationwide issue, and has seen the closure of plants in other parts of New Zealand.”
The next group of four industries with “potential” to grow the economy included IT/tech, tourism, wool and textile manufacturing, and screen/motion pictures and creative.
The economic reports can be found on the Hawke’s Bay Regional Economic Development Agency website and will be used to assist future decision-making.
The six key industries in Hawke’s Bay
Construction
Jobs: 10,440
Value: $924 million to Hawke’s Bay economy
Horticulture and winemaking
Jobs: 6868
Value: $558m to Hawke’s Bay economy (excluding exports)
Farming and meat processing
Jobs: 5898
Value: $518m to Hawke’s Bay economy (excluding exports)
Forestry and wood processing
Jobs: 2140
Value: $372m to Hawke’s Bay economy (excluding exports)
Machinery and equipment manufacturing
Jobs: 1540
Value: $206m to Hawke’s Bay economy (excluding exports)
Food and beverage manufacturing
Jobs: 751
Value: $81m to Hawke’s Bay economy (excluding exports)
*Data is based on 2023 which was heavily impacted by Cyclone Gabrielle
Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.
