Economist Cameron Bagrie says Whanganui needs to sort out its economic story and social statistics.
Economist Cameron Bagrie says Whanganui needs to sort out its economic story and social statistics.
Whanganui may be humming at the moment but a leading economist says there doesn't seem to be a concrete plan for its economic growth.
Cameron Bagrie, of Bagrie Economics, was in Whanganui this week to meet with business leaders and speak at the opening of Bayleys Whanganui's new premises.
Bagrie - the former chief economist for ANZ - has spent a bit of time looking at the property market in Whanganui in recent months and said it has given him a good appreciation of what's happening locally.
"Whanganui has a pretty good hum about it," Bagrie said.
"Whanganui is outperforming on a lot of benchmarks. The property market is ripping along. But unemployment is well above the national average and employment as a share of population is well below.
"They need to be priorities and you can't turn it around overnight. It needs a co-ordinated strategy between business, central government and local government."
Traditionally, in comparison with the main centres, Whanganui's economy "goes late and goes real hard" and that's happening at the moment, Bagrie said.
"It goes flat for eight to 10 years then plays an awful lot of catch-up."
He compares New Zealand's economy to a truck and trailer unit, where Auckland is the truck and the rest of New Zealand is on the trailer with a rubber band connecting the two.
"Auckland's moving into reverse and the trailer is still playing catch-up from behind.
"There are massive valuation differences. Auckland valuations are nine times incomes. In Southland they're just under four times incomes. Whanganui and Manawatu are in the fours. The cheaper regions are attracting more people, attracting more capital."
For Whanganui's future economic wellbeing, the priority needed to be getting more money into people's pockets and improving social statistics but there was no quick fix, Bagrie said.
"Don't go looking for big magic potions – they tend to be snake oil, they don't exist. People look to central government to solve the problem but it needs to be led by the region itself; led from within and supported by central government."
Bagrie says the government's regional growth fund would not be "economic nirvana".
"The regional growth fund is not a silver bullet. You need to sit down and find your point of difference. It's not just economic. It's things like schools. Having good schools helps people decide to move here. A skilled workforce in certain areas can be a big differentiator.
"You need to ask 'What do we have that's unique' and build a proposition within the region around that.
"One key is getting the right people in the right place. You need to be good at telling the story of the region."
Whanganui's reasonably diversified economic base is an advantage, Bagrie says.
Bagrie said he had done some research and was unable to find a plan for Whanganui's economic growth "but maybe I was looking in the wrong place". People he had spoken to locally could not say what the plan was.
"You need something concrete - business leaders couldn't really articulate what the plan was. When they're travelling around New Zealand and talking to people, business leaders need to be able to fully articulate Whanganui's economic story.
"If you don't get the economic story right, you will struggle with the social side as well. They go hand in hand and need to be viewed as together.
"It's all these little things. You need to be pretty adaptive and flexible. Standing still isn't an option – unless you want to stand still. GDP below 40 per cent of the national average is quite a telling statistic. You will lose the best and the brightest if they can get something better somewhere else."
Whanganui had opportunities it could capitalise on, including the rail link to the Castlecliff industrial area.
"I think there's a good little manufacturing hub happening out at Castlecliff. There are tourism opportunities. There's a reasonably diversified economic base which I think is a big advantage.
"It's a nice-looking town which is a big advantage when it comes to bringing people in.
"We have to encourage risk taking. That doesn't mean become mad-out gamblers. It's calculated risk versus return. We need to encourage people to have a bit of a crack. Sometimes it needs a nudge in the right direction from the policy makers. The private sector should be prepared to step up to the mark.
"The tipping point is when a whole lot of little things come together. It's incremental economic improvement. It's no one big thing. It's a question of getting a lot of little things done well that will make a difference collectively.
"Think about what things will work and fix it up. It's not hard."
Cameron Bagrie was guest speaker at the official opening of Bayleys Whanganui's new premises.
