Whakatāne coast. Photo / File
Dairy, horticulture, wood, and some of the best beaches in the country have seen the Bay of Plenty's economy top a regional performance ranking.
The Infometrics Quarterly Economic Monitor regional economy performance, released today, found the Bay of Plenty was the strongest of New Zealand's regions over the March 2021 quarter.
According to provisional Infometrics estimates, the region's economy rose 3 per cent on the same time last year. The national economy slipped back 0.3 per cent.
While Rotorua continued to struggle with a lack of tourism, eastern and western parts of the region pulled the Bay into the top spot.
Infometrics senior economist Brad Olsen said this was down to higher commodity prices that supported economic activity in the region, with good returns for dairy, meats, horticulture, and wood exports.
Tauranga and the Western Bay of Plenty were maintaining their economic strength - Tauranga was up 3.6 per cent and the Western Bay 3.1 per cent.
Rotorua was "still hard hit," but saw a rise in its economy over the last quarter of 0.3 per cent.
Olsen said this was "not too bad, all things considered".
He said the "bolstering" activity in the rest of the Bay, particularly in the primary sector, "more than outweighed" Rotorua's lower growth.
But Whakatāne was the region's star, up 7.4 per cent.
Olsen said over the quarter there was "strong domestic activity, particularly coming through Whakatāne and the wider Eastern Bay of Plenty area."
However, he said there was still a "relatively tight" labour market in some sectors.
He expected the "strong primary sector focus" in the Bay of Plenty "will certainly keep things in a much better position".
He said there was uncertainty about how the tourism market would play out.
Tauranga Chamber of Commerce chief executive Matt Cowley said overall, things looked "cautiously optimistic".
He said the kiwifruit industry will keep the money flowing in with another big picking season and the construction sector was strong, catching up on the shortage of housing.
However, supply chain disruption and government decisions on opening borders over the next year had businesses feeling a lot of uncertainty, he said.
Priority One chief executive Nigel Tutt said the economic development agency expected the economy would continue to do well for the rest of the year.
"The Western Bay of Plenty economy has been very resilient on the back of a strong export sector, low exposure to tourism and travel, and the momentum of previous growth," he said.
With that, economic conditions would likely improve and businesses were gaining confidence, he said.
However, there was still some caution around staff availability and international supply chain disruptions, he said.
Eastern Bay of Plenty Economic Development Agency general manager Karl Gradon said there was no single factor behind the success of the Eastern Bay.
However, a low base to start from coupled with a "huge surge in confidence" following the Provisional Growth Fund announcements for the Eastern Bay - which saw more funding committed than any other area per capita.
He said the investments were supporting "catalytic" infrastructure rather than businesses which was "huge" for the area, and a thought-out move in creating jobs in the region.
"We have seen huge transitions from dairy and maize, to high-value horticulture. Most of the horticulture expansions are happening here, they're not happening in the Western Bay where they used to."
On top of that, the area's beautiful beaches and sunny weather had drawn travellers unable to visit the likes of Fiji or Bali.
"People have had on their bucket lists places like the East Cape, Te Kaha, Te Urewera ... they want to find the best beaches in the country and they've been getting out there and doing it.
"The best sunshine in the country is here. The best temperatures are here. All of a sudden, our secret's out."
He said the growth across the region has been "incredible" - domestic tourism and kiwifruit has had the best season ever, dairy had the second-best and strong forestry sector.
"We would agree that the peak over the last three months is a result of higher commodity prices, with good returns for dairy, meats, horticulture, and wood exports."
New Zealand Kiwifruit Growers Incorporated communications manager Mike Murphy said the 2021 season is forecast to be another record-breaking year.
Kiwifruit production would overtake last year's record of 157 million trays of green and gold. On average, each tray has around 30 pieces of kiwifruit.
More than 80 per cent of the country's kiwifruit is grown in the Bay of Plenty across 10,000 hectares of orchards.
He said the peak harvest has just finished with around 20,000 seasonal workers required to pick and pack the crop in the Bay of Plenty.
The industry contributed $1.5 billion to the region last year.
A national Westpac's Economic Overview found dairy, horticulture and forestry commodity prices have been the "chief beneficiaries of the firmness in global demand".
Green kiwifruit grower returns for last season were the highest on record, and second-highest for gold kiwifruit while export log prices jumped more than 20 per cent in the last six months.
Western Bay of Plenty District could have fewer councillors to vote for next election.