Bay of Plenty confident in kiwifruit and avocado sectors

Zespri chief grower and alliances officer Dave Courtney said the Bay continued to be the heart of the kiwifruit industry. Photo / Supplied

Experts say a significant increase in economic confidence in the Bay of Plenty was related to higher avocado and kiwifruit prices.

A Westpac-McDermott Miller Regional Economic Confidence survey for the June 2018 quarter showed a net 45 per cent of Bay households expected their region's economy to improve in the next 12 months.

Westpac chief economist Dominick Stephens said the optimistic outlook reflected the performance of the horticultural sector, which had benefited from higher avocado and kiwifruit prices.

"Elevated forestry and dairy prices, increased tourist arrivals and the likelihood of more investment out the Provincial Growth Fund is also likely to have lifted the mood," he said.

Zespri chief grower and alliances officer Dave Courtney said the kiwifruit industry returned about $620 million to Te Puke, $160m to Katikati, $135m to Opotiki and $70m to Whakatāne in direct grower payments last season.

Courtney said the industry was set to nearly double global sales from $2.4 billion last season to $4.5b by 2025.

He said the growth had a positive spinoff for the region, with a recent University of Waikato report predicting 29,000 more kiwifruit jobs by 2030 - half offered in the Bay.

New Zealand Avocado chief Jen Scoular said the avocado industry had seen significant increases in returns in the past four years.

"Sixty per cent of avocado production is in the Bay of Plenty and contributes significantly to the community through opportunities for labour, development of profitable land use and financial grower returns being invested back into the wider community," she said.

Scoular said excellent orchard-gate returns, a strong global demand for avocados and a "rosy" future for the industry resulted in new and renewed investment into avocados.

"The 2017-2018 season returned record per-tray prices of avocados from key export markets," she said.

"The industry has seen large-scale investment in new plantings across all growing regions, which will position the industry to sustainably develop high-value markets offshore.

"The new plantings will allow for future capability to meet demand."

Scoular said the recent approval of market access for New Zealand avocados into China was a huge opportunity for the industry, with the first exports to be shipped from September.

Despite confidence in horticulture, the report showed the potential spreading of the Mycoplasma bovis cattle disease was likely to have caused concern.

Construction activity was also expected to soften given a recent fall in building consents.

However, Tauranga Chamber of Commerce chief executive Stan Gregec said new businesses in the Tauranga CBD proved there had been no let-up in the city's construction activity.

"That will continue for some time yet. We are still seeing many new arrivals and new businesses starting up all over town," he said.

"The fundamentals for the local economy are strong, and this is translating into economic activity and confidence."

Priority One chief Nigel Tutt said building consents in Tauranga and the Western Bay of Plenty were well ahead on last year.

"We are also seeing lots more opportunities created in this region from business and people," he said.

The New Zealand Certified Builders Tauranga chief Grant Florence said despite a dip in building consents many NZCB members were booked up until December 2019.

"We believe that with continued internal migration into the region, further releases of developed land and consumer confidence remaining strong in the Bay of Plenty, residential activity will remain strong," he said.

"This will be supplemented by a growth commercial construction sector."