‘Massive recession’ likely for Hawke’s Bay, Wairoa Mayor Craig Little says

Are we poor now? It’s an inherently loaded question, and difficult to answer. But with Cyclone Gabrielle hobbling some of Hawke’s Bay’s key industries, the cost of living still going up, interest rates showing no sign of dropping, and rates bills set to skyrocket across the region, Wairoa Mayor Craig Little is convinced our towns and cities are in the midst of a “massive recession”. Hawke’s Bay Today decided to see if people were feeling the pinch.

The streets of Hastings are busy being infilled with new buildings, restorations and exciting artwork.

Talk to one person and they’ll say it feels like progress. Talk to another and they’ll say it feels like a facade.

Wairoa Mayor Craig Little is frank about the challenges ahead of the region. Cyclone Gabrielle has hammered key businesses and industries and caused $5 billion worth of damage in the region so far. Three Waters costs are being put back to councils.

As a result, rates bills are going to soar across the region, with more than 20 per cent increases mooted in many places.

“There is a mountain of cost ahead of us - there is a massive recession in front of us,” Little said.

“So yes, Hawke’s Bay is poor.”

Wairoa Mayor Craig Little says massive costs are set to put big pressure on ratepayers in the region. Photo / Neil Reid

Little said homeowners probably weren’t prepared as a “lot of people have debt in their home” and the possibility of having to put more burden on them wasn’t sitting well for him.

“Elected members are also ratepayers, if we voted for rates increases that would affect us too.”

Napier Mayor Kirsten Wise said aware of the pinch the community was feeling.

“That tight fiscal climate is affecting households and councils across the country.

“We are putting in place really strong measures to make sure we can deliver what our community needs from us now but also ensure we’re setting future generations up with a strong and sustainable foundation.”

ASB chief economist Nick Tuffley said Cyclone Gabrielle had caused a huge amount of disruption to the region and recovery was ongoing, but the recovery work could also contribute to economic recovery.

“What you often see after a disaster is lot more activity happening even if some of that is, shall we say, happening for ‘the wrong reasons’ in terms of getting things back to normal,” Tuffley said.

“We have seen in the construction sector a lot more consents relatively speaking, for rebuilding activity, and fairly decent employment outcomes in the broader East Coast region as well.”

He said while issuance of dwelling consents nationwide fell about 19 per cent from December 2022 to December 2023, they increased 28 per cent in Hawke’s Bay.

Delays in the publication of regional GDP data meant economists relied more on how retail, building, employment and housing activity looked to get a picture of the state of a region.

“It has been a tough time for retailing, but we’ve seen Hawke’s Bay, if anything, marginally outperformed what we’ve seen around the rest of the country.”

He suggested this may be due to the need to replace things after the cyclone, but believes the impact of that boost would have likely run its course.

Tuffley said Hawke’s Bay was also positioned to benefit from the recovery in the tourism sector, but was exposed to challenges in the wine export industry and global sheep meat market.

He said there will be a better sense of the overall state of the region when ASB’s regional economic scorecard for the fourth quarter of 2023 is published in a couple of weeks.

“When we did our September one, there were some signs Hawke’s Bay had been moving up the ranking compared to the end of 2022 for example, so watch this space.”

On the streets

Arpita Dhakecha said she felt opportunities were good in Hawke's Bay. Photo / Warren Buckland

On the streets of Hastings, Hawke’s Bay Today asked MP Foods worker Arpita Dhakecha, 32, if times were tough.

She said there were plenty of good job opportunities in Hawke’s Bay, and overall things still felt “very nice and peaceful”.

Jake Hill works at Cotton On in Hastings and believes that Napier and Hastings are growing cities. Photo / Warren Buckland

Sixteen-year-old Jake Hill, who works at Cotton On in Hastings, said he wouldn’t say the region felt as if it was poor.

“There is definitely a lot of financial struggle in certain parts but if you look at our main streets at the back end of Hastings you can see there is a lot of wealth.

“There are a lot of buildings and stuff getting rebuilt - we are definitely not poor.”

Stefan Burt said Napier has struggled since the cyclone. Photo / Warren Buckland

Stefan Burt 45, owner of Rosie O’Grady’s Irish Pub in Napier, Taradale and Hastings said overall Hawke’s Bay was a great region.

“We have had some tough times with business in Napier, and Hastings seems to be thriving at the moment.

“Napier has never really recovered from the cyclone, there is a lot of work to there still, but as a region Hawke’s Bay is amazing and we have a lot to offer.”

Lynda Jackson from Napier said it was important for people to value their money. Photo / Warren Buckland

Retired Napier woman Lynda Jackson, 72, said she felt there were still ways to make ends meet in the region.

“If you value and use your dollars correctly, I think you might be able to survive. I think some people don’t get off their backsides.”

“People can get out there if they want to, but I don’t think they have the opportunity to get their trade.”

Hastings man Brendan Hayes, 58, is between jobs and said he felt the region was poor.

“I notice there are a lot of shops that are closing one after the other and that is not a good sign, it is a sign that we are going in the wrong direction.”

“The Mayor keeps saying we are vibrant and eclectic and that sort of stuff, and I think she’s wrong.”

Georgia Taylor felt the beggars outside Pak’nSave were a sign of Hawke's Bay's financial problems. Photo / Warren Buckland

Georgia Taylor, 24, is currently looking after her father and is from Maraetotara and said she felt if people looked closely enough, they’d see the signs of deprivation already.

“If you drive down by Pak’n Save you would probably see the local bros asking for donations and things like that.

“Just look around we have got a $20,000 spinning apple sculpture that is running nicely, but we have holes in the roads - it’s just a big joke.”

Edward Taylor said some people in Hawke's Bay were as poor as church mice. Photo / Warren Buckland

Edward Taylor, 77, and retired said the plight of Flaxmere, which has just lost its only supermarket, was a sign.

“Are we poor in Hawke’s Bay? Yes, of course we are. We are like church mice.

“Just look around go down Flaxmere, go down all the other outside places. But don’t go to Havelock North, where the wealth is, because you will see a different life altogether.”

In the boardroom

Todd Dawson, Napier Port chief executive, sees signs to be optimistic.

“This year we’re seeing a positive uptick in horticulture, agriculture and forestry cargo coming through the gates. Also, a record cruise season that is bringing in over 130,000 visitors to the region, and their spend contributes to the economy.

“I think we’re again seeing the resilience of the primary sector and Hawke’s Bay coming through, particularly after a few tough years with Covid and then the cyclone. So, based on what we’re seeing now, I’m pretty optimistic when it comes to the future of Hawke’s Bay.”

Hamish Saxton, Hawke’s Bay Tourism chief executive, said the visitor economy recorded its highest ever contribution to Hawke's Bay's GDP in 2023. Photo / Simon Cartwright

Hamish Saxton, Hawke’s Bay Tourism chief executive, says tourism has buoyed the local economy in many ways this summer.

“Our visitor economy rebounded to record its highest-ever contribution to the regional GDP, of $775m for the 12 months to September 2023 and continues to employ one in 10 locals.

“It is the third biggest contributor to regional GDP and what’s more, trading conditions for tourism have not been this good for four years. This is evident for many of our operators, including the likes of Splash Planet, who have logged record seasons.”

Hawke's Bay Fruitgrowers' Association president Brydon Nisbet was among the many growers impacted by Cyclone Gabrielle. Photo / Warren Buckland

Brydon Nisbet, Hawke’s Bay Fruitgrowers’ Association president says he doesn’t think Hawke’s Bay is poor, even after the hit horticulture took during Cyclone Gabrielle.

“What Hawke’s Bay needs right now is some outside investment into its primary industries.

“Tourism is starting to boom again, the ships are coming back in, the primary industries are growing. I don’t think we are in a recession, I think we are in a place where we need investment and we need things to go our way.

“But I think we are on the right trajectory.”

Stuart Christensen, Tremains general manager for the Central Region, said the cost of living has gotten high, particularly with rent, commodities and mortgages, but he wouldn’t say Hawke’s Bay was poor.

“Hawke’s Bay is not booming, but we are doing pretty well,” Christensen said.

He said lots of people were coming from places like Auckland to live in Hawke’s Bay and the region was still seeing good visitor numbers from cruise ships.

“That there tells me that Hawke’s Bay is an attractive place to live.”

From a real estate perspective, he said there was more property on the market and more sales being made than this time last year in Hawke’s Bay.

Michaela Gower joined Hawke’s Bay Today in 2023 and is based out of the Hastings newsroom. She covers Dannevirke and Hawke’s Bay news and has a love for sharing stories about farming and rural communities.

James Pocock joined Hawke’s Bay Today in 2021 and writes breaking news and features, with a focus on environment, local government and post-cyclone issues in the region. He has a keen interest in finding the bigger picture in research and making it more accessible to audiences. He lives in Napier. james.pocock@nzme.co.nz