Tourism continues to struggle in the Bay of Plenty despite the region's economy performing strongly. Photo / Getty Images
Tourism continues to struggle in the Bay of Plenty despite the region's economy performing strongly. Photo / Getty Images
The Bay of Plenty will continue to grow next year sheltered by the primary industries, but the foot is expected to come off the accelerator.
Those are the key findings in the Westpac December Regional Roundup outlook, which says the region was less affected by Covid restrictions and economic activityhad been strong.
However, some sectors would not leave 2021 unscathed, and Rotorua more than Tauranga had taken a Covid hammering.
Westpac industry economist Paul Clark. Photo / Supplied
Westpac industry economist Paul Clark said consumers in the Bay continued to spend, the national kiwifruit crop was 16 per cent higher and the housing market was still posting record highs.
''The overall firm level of economic activity has contributed to falling rates of unemployment in the region. Strong demand for labour has in turn supported wage growth and household incomes.''
Clark said the Bay was expected to perform positively, although growth was likely to be moderate.
''We expect that another bumper harvest on the back of recent gold kiwifruit plantings will lead grower incomes higher next season. And while prices may ease over 2022, that is unlikely to be enough to offset the higher fruit volumes.''
Tourism, hospitality and retail sectors would get a leg up, the housing market could ease, but forestry was likely to get a tough start as Chinese demand for export logs had plunged.
Rotorua Chamber of Commerce chief executive Bryce Heard said parts of the Rotorua economy had been ''crucified'' this year, but some sectors had performed well.
''In the order of magnitude tourism is worst, hospitality is second and retail has been affected as well. The three big drivers in Rotorua are farming, forestry and tourism - and it's the sector that is exposed to tourism, that has taken a beating.''
''There has been a lot of casualties to be fair.''
Heard said farming, which contributed more to the economy than most New Zealanders realised, was robust.
''They've had a tough time with legislation but they are still performing strongly.''
Meanwhile forestry had been patchy, although wood processing plants were busy.
He said next year looked ''really murky'', but there could be a progressive return to normality if a high vaccination rate could be reached.
Heard said he was ''cautiously optimistic'' on the future.
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys. Photo / NZME
Simon Anderson, managing director of Realty Group, which operates Eves and Bayleys, said the Bay of Plenty was insulated by other industries including horticulture and agriculture.
''That gives confidence to the local economy ... and adds to what we are seeing in the housing market. We have seen a very buoyant market and something we probably didn't predict pre lockdowns.''
Anderson said there had been an increase of listings with more new homes coming to the market in the future, but rising interest rates had added pressure.
''So considering all those factors, I think next year we will see a levelling out.''
Kiwifruit has been one of the main drivers in the Bay of Plenty's strong economy. Photo / Supplied
Zespri chief global supply officer Alastair Hulbert said this year about 177 million trays of class 1 kiwifruit were exported to more than 50 global markets.
It was also a record SunGold season with more than a hundred million trays exported for the first time and about 77 million trays of green kiwifruit.
Hulbert said demand remained strong and our global marketing campaigns had generated great support.
''We've seen a shift in consumer preferences towards products high in nutrition and which boost immunity resulting in greater demand for products high in Vitamin C.
Manulife Forest Management NZ Ltd general manager Kerry Ellem said it has been a game of two halves.
Log prices hit high levels mid-year, but demand had fallen in China with wood piled up at their ports.
''The first part of the year was pretty positive and the second has been more difficult, but the domestic market is very strong.''
He said high freight prices and port congestion had added to the issues.
''It's probably going to be the second quarter of next year before we see the export market come back to normal levels.''
Tauranga Chamber of Commerce spokeswoman Anne Pankhurst. Photo / NZME
Tauranga Chamber of Commerce spokeswoman Anne Pankhurst said for some of its business community, it had been extremely challenging, while for others it has been a positive year.
''One of the common lowlights is the impact of the skills shortage and how hard it is to get staff. There doesn't appear to be any relief for this into the future. The highlights are where businesses have adapted to what is now considered business as usual – we've seen an increase in flexible working and thinking digitally, overcoming geographical boundaries when it comes to doing business.''
The skills shortage would continue to affect businesses, she said.
''Skills shortages are not limited to the local economy; it is a global phenomenon. The supply chain for a number of sectors is also causing concern, pushing prices upwards, particularly in the construction sector.''
Off the back of the highly productive kiwifruit industry and with the population growth stimulating the construction sector, the Bay would continue to experience strong growth and positive economic results, Pankhurst said.
