A bumper kiwifruit season has helped lift the Bay of Plenty's economic performance.
A bumper kiwifruit season has helped lift the Bay of Plenty's economic performance.
The Bay of Plenty’s economic performance ranking is rising thanks to a boost from a “bumper” kiwifruit season — but challenges remain, a new report says.
The quarterly ASB Regional Scorecard has the Bay of Plenty climbing three spots to equal ninth position with Waikato in the third quarter of 2024. Otago and Canterbury were first and second.
According to the report, the bumper kiwifruit season was likely a big contributor to the Bay’s jump in rankings, as were an annual 9% increase in car registrations and a 9.1% rise in houses sold.
“We are hopeful for another excellent [kiwifruit] season, supporting the region’s exports. Additionally, improved dairy prices and potential interest rate cuts are expected to boost the economy,” the report said.
Construction saw a “significant decline” of 24.5% on last year, driven by non-residential consents, house prices dropped 0.6%, and employment remained flat with a 0.4% decline.
The slower pace of tourism recovery was also cited as a challenge.
Tauranga Chamber of Commerce chief executive Matt Cowley said a range of sectors were “doing it tough”, but the main pillars holding up the Western Bay economy were still kiwifruit and steady long-term population growth.
“Overall, the Western Bay will be doing marginally better than the wider Bay of Plenty region, as forestry and slow tourism recovery has held back other parts of the region.
“Anecdotally, we hear a number of local manufacturers are bucking nationwide trends by experiencing growth. These manufacturers are exporting overseas, meaning they are less exposed to the tight domestic discretionary spending issues.”
Tauranga Business Chamber chief executive Matt Cowley. Photo / Mead Norton
Looking ahead, Cowley said there was hope the Bay could get back to building more houses as interest rates continued to ease and new infrastructure opened up more land for development.
Rotorua Business Chamber chief executive Bryce Heard said kiwifruit was a strong driver for the Bay of Plenty and had helped offset the weaker performance of the forestry sector, which had been hit by the slowdown of the Chinese economy.
“If we can get international tourism back to or above pre-Covid levels, this will further bolster the Bay of Plenty performance.”
Heard suggested some key Bay sectors get together to improve performance collectively.
“Forestry and tourism look like two sectors that might benefit from a fresh rethink of their growth strategies.”
Rotorua Business Chamber chief executive Bryce Heard. Photo / Andrew Warner
He said the Bay of Plenty was the only region in the North Island that had improved its rankings on the scorecard, whereas Auckland and Waikato had each dropped nine places. This was an “interesting trend”, he said, which may have been driven by higher meat and milk prices.
The flat-lining house prices were “good” Heard said, as the housing market had previously been “overheated”.
“We seem to have quickly forgotten how concerning the housing market was just a couple of years ago.”
Inflation being brought back to 2.2% earlier than most had predicted was an “early success for the new Government”, Heard said.
Kiwifruit Growers Incorporated chief executive Colin Bond said the kiwifruit industry had just come to the end of a “very successful” season and the largest ever volume, just short of 200 million trays of kiwifruit, had received strong returns in overseas markets.
New Zealand Kiwifruit Growers Incorporated chief executive Colin Bond. Photo / Quinn O'Connell
Bond said kiwifruit had the highest export revenue from New Zealand’s horticulture and viticulture products. Eighty per cent of the country’s kiwifruit orchards were in the Bay of Plenty and contributed significant returns to the region’s economy — $1.82 billion in 2022/23 — as well as thousands of jobs.
“While it is early days, growers are quietly hopeful that the current season, which will be harvested from the end of February 2025, will be another strong one.
“While the industry we work in is increasingly challenging and complex, growth is also forecast for the coming years. Demand for our fruit remains strong and the production from the Bay of Plenty continues to grow steadily.”
Tauranga City Council general manager of regulatory and compliance Sarah Omundsen said the number of building consent applications for new dwellings in Tauranga had dropped since the record highs of 2021.
The Official Cash Rate increases in 2021 and 2022 and increasing home lending interest rates contributed to a resulting drop in consents, Omundsen said, and this trend continued after rates stabilised. This was not unique to Tauranga, she said.
Residential building consent volumes in Tauranga had increased by about 10% since July, aligning with when the Reserve Bank lowered the official cash rate in August, Omundsen said, and the volume of commercial consents had been “reasonably stable” in the past four years.
Rotorua Lakes Council hit a new 12-month high for dwelling consents in the district in the 12 months to October, destination development group manager Jean-Paul Gaston said in a report for the December 4 Rotorua Lakes Council meeting.
The report said it was the third consecutive year of records and Rotorua continued to buck national trends with a solid pipeline of houses being built.
There were about 840 dwellings in the consenting process as of October, with data indicating stronger numbers in eastern and western areas of Rotorua.
Sonya Bateson is a Bay of Plenty-based regional content leader with more than a decade of experience reporting in the Bay of Plenty region.
