Taranaki Economic Outlook: Challenges Remain, But Signs Of Recovery Ahead

The economy in Taranaki, like much of New Zealand, continues to feel the effects of a tough economic climate. This was reflected during the latest economic briefing event hosted by Te Puna Umanga Venture Taranaki, the regional development agency, where recent data was presented alongside insights from local leaders.

However, while most sectors remain under pressure, a gradual improvement is anticipated as the year progresses. This sentiment was echoed by the majority of the 130 attendees who felt that while the economy has been difficult to navigate, they expect it to either stay the same or improve over the next 12 months.

"As a business, sailing a boat in these types of conditions is tough," said Anne Probert, Director of Strategic and Sector Partnerships at Venture Taranaki. "While we can’t always control the wind, it’s about reading the environment and adjusting the sails-navigating the best course through change. It sounds like our local business community is doing just that."

Recent data from Infometrics (purchased by Venture Taranaki and made publicly available here) shows a provisional decline of 2.3% in average annual GDP for the region.

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"The decline in gas production, combined with the unique circumstances that saw Methanex pause production to help support the national grid during the energy shortage late last year, had a particularly strong impact on the region’s economic activity", said Probert.

Employment data reveals a moderate decline, with an average of 56,037 people in work during the year to December 2024 - down 0.9% from the previous year. However, the regional unemployment rate stood at 4.0% (annual average), remaining below the national average of 4.7%. This indicates a degree of resilience in the labour market, despite wider economic pressures.

Consumer spending in Taranaki has been more cautious over the past year, with a 1.0% decline compared to a modest 0.2% increase nationwide. However, easing mortgage rates could start to slowly free up disposable income, helping to lift retail and hospitality spending later in the year. Online spending has remained strong, with Taranaki leading the country in e-commerce growth, growing 17.6% compared to a New Zealand average of 5%.

"We’re seeing a clear behavioural shift with consumers in the region shopping around more, looking for the best value in tougher conditions," said Probert. "At the same time, this creates opportunities for local businesses to strengthen their digital offerings and reach."

The construction sector has seen a significant slowdown, with the value of non-residential consents falling by 26.3% over the past year in the region. Nationally, consents were down just 0.9%, showing that Taranaki has been more affected than some other regions. However, house values in Taranaki have increased by 2.8%, a contrast to the 2.0% decline seen across New Zealand, suggesting growing confidence in the housing market.

Meanwhile, there are some positive signs in the agricultural sector. Beef prices are on the rise, and if dairy production levels hold, the 2024/25 payout could inject an estimated $1.8 billion into the regional economy.

However, Probert urges caution, "With the drought currently impacting production levels and costs in the region, coupled with farmers under pressure to recuperate costs from previous years, returns will realistically be challenged. That being said, on a national level, it is hoped that the primary sector can play a key role assisting the economic recovery, with rising export earnings supporting rural economies."

Globally, economic growth has also been down, and as an open trading country, this also impacts on New Zealand’s prosperity, as well as the region. Furthermore, the uncertainty fuelled by tariff wars and other issues may have direct, indirect, and ripple effects for Taranaki.

During the event, Venture Taranaki Chief Executive, Kelvin Wright, facilitated a panel discussion with local business leaders, focussing on navigating change in an evolving economic landscape.

"While the economic transition continues, there will be changing and challenging times for Taranaki," said Wright. "It’s positive to see that leaders across the region are focused on innovation, diversification, and sustainability-adapting where possible to survive and even thrive in this economy."

Leadership, innovation, and adaptability continued as key themes during the briefing. Attendees heard from Iain Hosie, born and raised in Manaia, who is a biochemist, deep-tech entrepreneur, and materials science expert with a career spanning research, product development, and governance. Iain shared insights into emerging opportunities for Taranaki in science and commercial biotech as part of his work supporting the establishment of the Taranaki Applied Innovation Centre, a project led by led by Venture Taranaki.

If you need business support, please complete the support enquiry form on the Venture Taranaki website, here: https://www.venture.org.nz/enterprise-and-entrepreneurship/business-registration-form-2/

To view the recent Infometrics data for Taranaki, here: https://www.venture.org.nz/assets/Quarterly-Economic-Monitor_taranaki-region-2024-12.pdf 

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