Water has multimillion-dollar role for Hawke's Bay economy

With a primary production based economy, economist Sean Beavin says water plays a critical role. PHOTO/FILE

With water playing a "critical", multimillion-dollar role in Hawke's Bay's economy, planning is needed to ensure increasing demand can be catered for.

This was the message from Hawke's Bay economist Sean Beavin at last week's water symposium, when he presented on the importance of water as an economic resource and asset for the Heretaunga Plains.

"Water is critical to the economy of Hawke's Bay," Mr Beavin said this week. "It's important to keep a close eye on the water demand."

According to a 2012 consultancy report, Hawke's Bay's key water bodies have a total economic value of $311 million, he cited.

The main water sources for the local economy ranged from the fishing values of Hawke Bay and surrounding sea, to rivers providing economic benefit through recreation and tourism.

However, the water body used as a source for the region's main economic contributors - industry, and the agriculture and horticulture sectors - was the Heretaunga aquifer.

According to the 2012 report, this water body alone accounted for 45 per cent of the $311m - which equates to around $13.9m.

Only 5 per cent of water in the aquifer is consented for use. Around 75 per cent of this is consented for irrigation, and industry purposes - two of the region's primary economic contributors.

Broken down, 50.5 per cent is used for irrigation - which encompasses some of the region's primary industries, including horticulture, and agriculture.

Just over 24 per cent of consented water is used in industry and manufacturing - which included food processing, textile processing, recreation, and quarrying.

With the Hawke's Bay economy being primarily production based, this means these water using sectors account for nearly 60 per cent of the gross domestic profit (GDP) of the total wealth generating industry base of the Heretaunga Plains.

These sectors also account for 55 per cent of employment, and overall these users account for 15 per cent of the total GDP and employment for the Heretaunga Plains area.

Water was also important to the tourism sector - which accounts for about 8 per cent of the Napier and Hastings GDP.

As well as being used to highlight the region's landscape, Mr Beavin said water also serviced the need of visitors - from domestic use, to recreation opportunities.

"Hawke's Bay has a broad based economy," he said. "It's very diverse, we've got everything.

"But it's important for the water authorities to be aware of the nature of our economy, and the growth outlook into the future."

Previous trends had shown the demand for water in Hawke's Bay was steadily increasingly - with demand tripling overall since 1979.

Since then household water use had remained "relatively stable", while industrial use had "taken off", but flattened over the last 10 years, Mr Beavin.

Irrigation use had "certainly increased a lot", and was continuing to increase over time.

Although the growth of water demand would fluctuate, "it's important for the providers of services like water to be aware of the overall growth situation and to plan for it", Mr Beavin said.

"Because it's not rapid growth it does give an opportunity for providers of water services to plan better ... that's helpful in ensuring the requirements of the region can be balanced."

Mr Beavin is director of Economic Solutions Limited, which prepares economic analyses and profiles of regions, districts and cities; identifies trends and provides forecasts in such fields as demography, business and industry, the labour market, the economy and the community.