Ports a core player in national economy

By ROB O'NEILL

Ports of Auckland claims that 173,000 jobs and $10.6 billion in regional economic activity rely on trade through its ports.

In its first economic impact assessment in six years, the company has identified what it calls a "core impact" from the ports of $307 million and a trade impact of $10.29 billion. The core impact is the value added to economic activity directly from port operations.

The study, undertaken by McDermott Fairgray Group, concludes that Ports of Auckland has an impact on one third of the total Auckland regional economy.

Its effect on the national economy has also been studied. The total effect on national economic activity is $13.24 billion in value added and 209,650 jobs. This includes a $309 million core impact from direct operations and a $12.94 billion trade impact.

Auckland's ports therefore impact on around 13 per cent of the national economy.

Ports of Auckland chief executive Geoff Vazey said the analysis revealed that, at 60 per cent, a larger proportion of imports than expected were intermediary goods.

"We had anticipated they would have been finished goods. In turn, a huge proportion of the exports were finished manufactures from the same entities that had imported the intermediary goods."

Mr Vazey said the interdependency of imports and exports indicated trade was critical to the economic value-added performance of the regional economy. That in turn was a driver in job creation.

Intermediary goods imports totalled $6.7 billion by value.

The report says a closure of the ports would cause the regional economy to shrink within five years by $720 million and would cost 10,000 jobs.

Both the Auckland regional economy and international traffic volumes are growing faster than national averages, indicating the contribution of the port is likely to grow strongly.

"Strong population increase, closer integration with the Pacific Rim urban economies, trade liberalisation and the expanding domestic market are expected to underpin steady expansion in Auckland," says the report.

Already traffic through Auckland accounts for 50 per cent of national seaport trade, which in turn is 78.5 per cent of total overseas trade.

Predicted growth indicates further and continuing increases in Auckland's share of the national economy.

The report will be used as independent evidence when applying for Resource Management Act consents.