Regional export growth shows pathway to national prosperity

A new report from Deloitte released today shows how export growth in key industries provides significant economic benefits for our diverse regions, and in turn for the country.

The second edition of Deloitte’s Shaping our slice of heaven series, entitled ‘Regions of opportunity’, assesses the economic impact of increasing exports in tourism, agribusiness, food processing and advanced manufacturing from Auckland, Waikato, Hawke’s Bay/Gisborne, Wellington and Canterbury, over the period 2019 to 2040.

The analysis reveals (by industry):

• Tourism – the New Zealand economy would be $11.5 billion larger and there would be 23,100 more jobs if the five regions meet national export growth targets set for tourism.
• Agribusiness – the economy would be $4 billion larger and there would be 6,500 more jobs if the five regions meet national export growth targets set for agribusiness.
• Food processing – the economy would be $10.6 billion larger and there would be 23,200 more jobs if the five regions meet national export growth targets set for food processing.
• Advanced manufacturing – the economy would be $6.1 billion larger and there would be 39,500 more jobs if the five regions achieved the national target for research and development (R&D).

The first edition of the series focused on the economic opportunities presented by export industries that are predicted to experience above average global economic growth and are industries in which New Zealand has comparative advantages. It identified five industries of global opportunity for New Zealand: tourism, agribusiness, advanced manufacturing, food processing and international education.

Deloitte Access Economics partner Linda Meade says the second edition moves away from the national view and takes a deep dive into New Zealand’s regions.

“We examine how increasing exports in four of the five industries identified in our first report (we haven’t included international education) can contribute to the economic growth of some of our country’s diverse regions; in this case Auckland, Waikato, Hawke’s Bay/Gisborne, Wellington and Canterbury,” says Ms Meade.

“These five regions are a mix of urban, provincial and mixed urban/provincial, and are home to over two-thirds of our population and account for three-quarters of the nations’ gross domestic product (GDP).”

The economic impact (in GDP terms) for each region (by industry) is:

Auckland
• Tourism - $3.9 billion
• Agribusiness – $2.5 billion
• Food processing - $6.1 billion
• Advanced manufacturing – $2.9 billion

Waikato
• Tourism - $1.4 billion
• Agribusiness – $500 million
• Food processing - $800 million
• Advanced manufacturing – $100 million

Hawke’s Bay/Gisborne
• Tourism - $900 million
• Agribusiness – $600 million
• Food processing - $500 million
• Advanced manufacturing – $200 million

Wellington
• Tourism - $2.5 billion
• Agribusiness – $600 million
• Food processing - $1.8 billion
• Advanced manufacturing – $1.5 billion

Canterbury
• Tourism - $600 million
• Agribusiness – $500 million
• Food processing - $1.5 billion
• Advanced manufacturing – $900 million

While all of New Zealand’s regions stand to benefit from export growth in key industries, such as tourism for example, neither the opportunities nor the benefits will be evenly distributed. Some regions may be better placed investing in other industries that draw on their strengths, including existing business clusters, natural advantages or logistics connectivity.

“In our view it is not enough to develop regional economic development plans region by region, without deliberate consideration of how the regions link together, and where each region’s competitive advantage lies,” says Ms Meade.

“New Zealand already has a well-developed national narrative about what makes its goods and services unique on the world stage. We propose there is further value to be unlocked by telling the ‘within New Zealand story’ that lies beneath,” she adds.
“Meaningful development of this narrative will require more coordination between central and local government than presently exists,” concludes Ms Meade.

You can read the full report at: https://www2.deloitte.com/nz/en/pages/economics/articles/shaping-our-slice-of-heaven-regions-of-opportunity.html

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