Value of regional economies stressed

Natural resources provide base for regional economies. Photo by Stephen Jaquiery.
Natural resources provide base for regional economies. Photo by Stephen Jaquiery.
Natural resource industries were the foundation for economic activity in most regional economies, Economic Development Minister Steven Joyce said yesterday.

Releasing the 2014 Regional Activity Report, Mr Joyce said policymakers at all levels needed to be careful about policy changes that would hurt those sectors and affect jobs and growth in regional New Zealand.

''Over the last decade, agricultural regions have benefited from rising commodity prices for dairy products and, more recently, meat.

"However, signs of recovery from the Global Financial Crisis are obvious across the board, with employment numbers increasing in all regions over the last year.''

The report highlighted the strength and challenges each region faced and the opportunities they had to further contribute to economic growth, he said.

It was a tool to support planning at all levels and the minister expected it to encourage public debate about how each region could be more successful.

The report included for the first time the official measure of regional gross domestic product, more comprehensive figures on employment incomes and new sections on population and economic development.

Mr Joyce said the Government was working on a series of more in-depth studies on the East Coast, Northland, Manawatu-Wanganui and the Bay of Plenty regions.

''Nothing creates jobs and boosts incomes better than business growth and investment. For New Zealand to build a more productive and competitive economy, we need all of our regions to achieve to their potential.''

Each region had advantages which it could build upon and diversify from, Mr Joyce said.

The Otago region contributed 4.3% of national GDP, provided 5% of national employment and was home to 4.8% of the population, the report showed.

From 2007 to 2013, Otago's GDP increased by 25.6%, slightly above the national movement. However, it was likely economic growth was unevenly distributed across the region.

In the past 10 years, population growth in Queenstown Lakes and Central Otago had been among the highest in New Zealand.

Population growth in the rest of the region, including Dunedin city, which made up half of the region's population, had been slower.

In the past five years, the region had experienced the second-highest positive net migration in the country, with a high proportion of migrants from Southland and Canterbury.

The report said Otago had a significant comparative advantage (or concentration above the national average) in sheep, beef cattle and grain farming, with activity primarily concentrated in Waitaki and Clutha, and a growing specialisation in dairy farming.

Central Otago had strengths in stone and pip fruit, grape growing and wine production. International tourism, concentrated in Queenstown Lakes, generated a high share of regional GDP and had shown solid growth over the past five years.

Professional, scientific and technical services experienced a 4% average annual employment growth over the past decade, while education and training employment grew 2.3% over the same period, reflecting Dunedin's strong tertiary education and research role.

The region's people had high levels of education attainment and skills. The region also enjoyed a below-average unemployment rate.

The region's average household income and GDP per capita sat below the national average.

The report said that was partially driven by the region's high share of tertiary students and seasonal workers earning part-time wages.

Otago could generate higher returns in its tourist sector through greater product and market segmentation with the aim of generating greater tourist expenditure per night.

Improved broadband access was expected to support education and facilitate business growth, including tourism in rural areas.

New irrigation schemes should increase the capacity for high-value primary production in rural Otago.

Dunedin could continue to develop high-value niches within health technologies and biotechnology, food processing, manufacturing, engineering, ICT and education.


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