Transitioning: Growth indicators heading in right direction, says Priority One chief executive Nigel Tutt. Photo / John Borren
Transitioning: Growth indicators heading in right direction, says Priority One chief executive Nigel Tutt. Photo / John Borren
The Western Bay of Plenty economy is performing well above the rest of the country, new reports show.
The subregion as a whole recorded GDP growth of 5.1 per cent last year - almost double the national average of just 2.7 per cent.
Tauranga's growth was 4.4 per cent, andthe Western Bay of Plenty District was 6 per cent, according to new reports commissioned by Priority One from Infometrics.
Priority One chief executive Nigel Tutt said the strong economic growth seen in the Western Bay of Plenty sub-region over the past two years was translating into increased jobs, higher GDP growth than the national average, and the evolution of a higher value economy.
"What it shows is that clearly, this subregion is performing well above the rest of the country," he said. "It's almost double the national average, which shows the trends are pointing in the right direction and the subregion, in general, is doing a good job."
Mr Tutt said it was good to see the strong growth in new businesses, employment and especially in knowledge intensive industries. (See accompanying story)
The labour market reflected economic growth, with 4178 new jobs created representing 5.1 per cent growth compared to the New Zealand average of 1.6 per cent. Job growth was strong across the majority of local industries.
The real estate sector was a leading contributor to GDP growth in Tauranga, with agriculture, forestry and fishing a key growth element in the Western Bay of Plenty District.
They say in 20-30 years, half the jobs that exist today will be gone. The future is in this knowledge area, and it's good we are making a start down that track.
Tauranga saw increased jobs in construction (764 new jobs), professional, scientific and technical services (390), and agriculture, forestry and fishing (349). In the Western Bay District, key job creation sectors included agriculture, forestry and fishing (452), administrative and support services (261), and manufacturing (222).
"Clearly we're still very strong in transport and logistics thanks to the port, and horticulture remains strong," said Mr Tutt. "But it's pleasing to see the growth wasn't specific to certain industries but was across the board."
Tauranga Mayor Greg Brownless said the latest data was great news.
"Especially as we're seeing growth in industries that aren't perhaps the traditional ones we have here," he said. "They say in 20-30 years, half the jobs that exist today will be gone. The future is in this knowledge area, and it's good we are making a start down that track."
Among broad industry sectors, manufacturing was the largest in Tauranga in 2016, accounting for 9.1 per cent of total GDP. The second largest was rental, hiring and real estate services (8.9 per cent), followed by health care and social assistance (8.9 per cent). Tertiary industries accounted for the largest proportion of GDP (35.8 per cent), higher than in the national economy (28.4 per cent).
However, taking into account relative sector sizes, the industry that made the largest contribution to Tauranga's GDP growth was rental, hiring and real estate services. That sector grew by 12 per cent over the year and contributed 0.99 percentage points to the district's total growth of 4.4 per cent. The next largest contributor was construction (0.82 percentage points), followed by professional, scientific and technical services (0.57 percentage points).
In Western Bay of Plenty District, tertiary industries also accounted for the largest proportion of GDP, at 35 per cent. The property operators and real estate services sector was the largest contributor to GDP (8.4 per cent), followed by health care & social assistance (7.6 per cent), and professional, scientific & tech services (6.7 per cent).
Taking into account the various sectors' relative sizes, agriculture, forestry and fishing made the largest contribution to the overall GDP rise in Western Bay of Plenty District. The sector grew by 9.4 per cent over the year and contributed 1.92 percentage points to the district's total growth of 6 per cent. The next largest contributor was rental, hiring and real estate services (1.59 percentage points), followed by manufacturing (0.71 percentage points).
"The latest statistics on economic growth in the Western Bay sub-region show in graphic form what people in this part of the world already know - the district punches above its weight economically."
A spokesman for the Western Bay District Council said it was no surprise to discover the area had higher than average growth in terms of jobs and business units.
"But some may not be aware that this includes strong growth in knowledge intensive industries. We also continue to have very high self-employment rates and it's pleasing to see a steady increase in annual earnings across the Western Bay District."
The spokesman said growth brought challenges, and the council was continuing to invest in infrastructure to service economic development.
Western Bay of Plenty working far smarter
The growth of knowledge intensive businesses in the Western Bay at 4.7 per cent last year outstripped the national average of 2.1 per cent, according to the latest Infometrics data.
"We are increasingly seeing the development of a comprehensive innovation ecosystem in the region, so it's great that this is now being reflected in results through the growth of knowledge intensive businesses," said Priority One chief executive Nigel Tutt.
"The data is confirming that the Western Bay subregion is transitioning to a higher value economy and is showing economic growth well above the national average," he said.
"One of the key areas of job growth has been professional, scientific and technical services, where 483 new jobs have been created in the last year. The growth in the Western Bay is largely reflective of the kiwifruit industry's amazing recovery from the PSA virus, which is due to the research and development the industry has undertaken over many years."
Mr Tutt said the subregion was also seeing more high-value businesses based in the Western Bay district, particularly around Katikati.
How the Bay compares
The latest quarterly Westpac regional roundup on economic confidence, for September 2016, showed both Auckland and the Bay of Plenty as a whole were continuing to enjoy strong economic confidence.
The Bay of Plenty, which had been the top performing region for economic confidence for six quarters in a row, flattened slightly for the September quarter to become the second-highest in the country.
"We expect the buoyant economic conditions to support strong levels of regional economic and employment confidence," the report said.
