Report to:
Bay of Connections
UPDATE OF THE BAY OF CONNECTIONS REGIONAL
ECONOMIC DEVELOPMENT STRATEGY:
ECONOMY, INDUSTRY PROFILE, AND PROJECTIONS
Prepared by
Jason Leung-Wai
Hugh Dixon
Kel Sanderson
Dr Ganesh Nana
August 2011
Copyright© BERL
BERL ref #5040
JEL Classification: R11 Regional Economic Activity; Growth, Development and Changes
2 Bay of Plenty Economic Profile Bay of Connections
August 2011
1 Executive Summary
This report is the first step in refreshing the 2008 Bay of Connections Regional Economic Development Strategy.
The purpose of this report is to explore what has changed, what is working and refocus the strategy to build on
what has already been done successfully. In addition, this report provides a new regional economic development
strategy framework that will support the Bay of Connections in identifying actions, generating outputs, and
delivering outcomes that grow the economy of the Bay of Plenty.
The focus of the strategy is on clarity and simplicity, with clear outcomes and a single primary measure of
success - employment. To summarise, the strategy focuses on aspirational employment growth delivered
through sector-based interventions.
As a sector based approach, interventions are at the sector level. As such, sectors selected need to:
be based on a regional capability or comparative advantage
be aligned with nationally competitive sectors
have strong sector buy-in and leadership
have areas/issues where intervention can support transformative growth.
Business and, indeed, the region, do not operate in a vacuum. Sector strategies and interventions need to be
considered in light of the regional, national and international economic environment, and global megatrends that
will affect what is demanded and how it is produced in the future. We expect that the New Zealand economy will
continue to be focused on export-based sectors. However, the international market will remain uncertain and
volatile over the next decade. In general, people are ageing, more mobile (nationally and internationally) and
demanding more. The environment and resources will matter more – sustainability is a key concept.
The Bay of Plenty region accounts for around six percent of the country’s population and employment, and five
percent of national GDP. In general, the region has tended to perform slightly better than nationally over the
longer terms (10 and 15 years) although change has been relatively consistent with national. Positive
performances have been driven by the Western Districts – Tauranga and Western Bay of Plenty; with Rotorua
and the Eastern Districts not performing as well as nationally. In particular population growth has been twice the
national average in the Western Districts, whereas they have been constant to falling in the other districts.
The industry analysis considered size, growth, and concentration of activity across industries in terms of both
employment and GDP. The analysis considered industry activity in the Bay of Plenty region as a whole, as well
as broken down into the three sub-regions and the six local authorities.
Based on the economic environment and an industry analysis within the Bay of Plenty and nationally, there are
13 key sectors within the Bay of Connections region that warrant consideration for inclusion in the Bay of
Connections Strategy. These are:
Kiwifruit
Dairy
Meat
Other Food Cultivation &
Processing
Forestry
Energy
Transport & Logistics
Tourism
ICT
Tertiary Education
Emerging Technologies
Marine
Aquaculture
3 Bay of Plenty Economic Profile Bay of Connections
August 2011
These sectors currently account for a third of regional employment and 35 percent of regional GDP. They are
largely consistent with nationally identified growth sectors and most are sectors where there are active industry-
led growth strategies.
While significant at a regional level, many of these sectors are geographically located in one or two of the sub-
regions.
Over the next 15 years, the majority of these sectors are expected to grow at a faster rate than other sectors in
the region.
Employment in the Bay of Plenty region is projected to grow at 1.5 percent per annum, which is 1.3 times the
national rate (1.0 percent). Employment is projected to increase by 1,360 annually, reaching 126,000 by 2026.
Employment in the strategic sectors is expected to grow at an even faster rate of 1.8 percent per annum, which is
1.6 times faster than employment growth across all industries and 1.4 times faster than the Other (non-key)
Industries in the Region. Of the projected additional 1,820 FTEs expected annually, 748 are likely to come from
the key sectors.
The key thing to note in this analysis is that
these forecast growth rates are what could be
expected and would likely occur if the Bay of
Connections did “nothing”.
However, the purpose of Bay of Connections
is to encourage growth in the Bay of Plenty
region and any intervention should result in an
increase in activity “above” what could be
expected. It is this “aspirational” growth that
underpins the Bay of Connections strategy
and forms the next stages of this project.
Assuming that these are the expected employment outcomes, the objective of the Bay of Connections strategy
would be to move these sectors up and to the right. The level to which the Bay of Connections strategy can
achieve this for each sector is what will determine the sectors supported.
1.1 Next steps
Stakeholder consultation and buy-in
Underpinning the success of the strategy is the contribution and buy-in from the region’s stakeholders.
Stakeholders need to agree on the approach and the key sectors and buy into and “own” the aspirational targets
for the aggregated strategy but also the individual sectors.
In particular, there needs to be agreement and buy in at the governance and management level, the sector
participants, central government agencies, and the civic leadership level. This will be achieved through a
strategy forum to be held in September 2011, but also through discussions within the various stakeholder groups.
Aquaculture
Forestry
KiwifruitDairy
Other Food Cultivation & Processing
Energy
Transport & Logistics
ICT
Marine
Tourism
Emerging Technologies
Meat
Tertiary Education
0%
1%
2%
3%
4%
5%
6%
7%
8%
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
% P
A I
ncr
eas
e
Additional FTEs to 2026source: BERL Regional Database and CGE Forecast to 2026
average growth rate of non-key industries
4 Bay of Plenty Economic Profile Bay of Connections
August 2011
Review and confirm the sector strategy action plans
Existing action plans need to be analysed to identify the potential employment and value added outcomes from
the interventions. For those sectors where strategies have not yet been developed, estimates of possible
outcomes need to be made
Align the action plans to allow an evaluation and monitoring framework
This involves identifying the expected outcomes of each sectors action plans by year. This will allow for annual
assessment of performance of each sector, as well as the ability to assess the performance of the strategy as a
whole. This is not expected to be a straight line increase as it will take into account the length of time required to
achieve the outcomes.
Assess the growth potential of strategic sector plans and align with the aspirational growth projection
The strategy scenario needs to be aspirational. In particular it needs to be a stretch target well beyond what
could be achieved if Bay of Connections did not exist. The aspirational target will be set based on a reviewed
BAU scenario and identified actions and outcomes for each sector. These targets will be developed with the
governance groups, particularly in relation to their existing involvement in sector strategies.
Draw up and deliver the updated the Bay of Connections Strategy
This pulls together the front end of the strategy – the vision, the themes and the desired outcomes; and combines
these with the key sectors and expected outcomes. The strategy should provide a clear picture of what it
expects to deliver.
5 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table of Contents
1 Executive Summary ........................................................................ 2
1.1 Next steps ........................................................................................................... 3
2 Introduction ..................................................................................... 7
2.1 Approach ............................................................................................................ 7
2.2 A sector-based approach .................................................................................... 8
2.3 Format of the Report ......................................................................................... 10
3 National and International Environment ...................................... 11
3.1 International Economy ...................................................................................... 11
3.2 National Economy ............................................................................................. 12
3.3 Global Megatrends ........................................................................................... 12
4 Bay of Plenty Economy ................................................................. 15
5 Industry Analysis .......................................................................... 19
5.1 Employment ...................................................................................................... 19
5.2 GDP .................................................................................................................. 21
5.3 Largest and fastest growing industries ............................................................. 25
5.4 Location Quotients ............................................................................................ 37
6 Review of Strategic Sectors ......................................................... 41
6.1 Approach .......................................................................................................... 42
6.2 Summary of employment and GDP in 2010 ...................................................... 44
6.3 Location Quotients ............................................................................................ 48
6.4 Relationships between regional and national sectors and sector strategies ..... 49
7 Business as Usual Projections .................................................... 51
6 Bay of Plenty Economic Profile Bay of Connections
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Tables and Figures
Tables
Table 2.1. Growth Sectors in New Zealand ..................................................................................... 9
Table 2.2. Some current national sector strategies .......................................................................... 9
Table 3.1. Global megatrends – some examples ........................................................................... 14
Table 4.1. Regional Structure ........................................................................................................ 15
Table 4.2. Key Economic Indicators .............................................................................................. 16
Table 4.3. Growth in Key Economic Indicators .............................................................................. 17
Table 5.1. Largest industries by employment by sub-Region, 2010 and 1995 ................................ 28
Table 5.2. Largest Industries by GDP by sub-Region, 2010 and 1995 ........................................... 30
Table 5.3. Rate and absolute growth by FTEs, 1995 to 2010 ........................................................ 32
Table 5.4. Rate and absolute growth by FTEs, 1995 to 2010 (cont...) ............................................ 33
Table 5.5. Rate and absolute growth by GDP, 1995 to 2010 ......................................................... 35
Table 5.6. Rate and absolute growth by GDP, 1995 to 2010, (cont...) ........................................... 36
Table 5.7. Bay of Plenty Location Quotients .................................................................................. 37
Table 5.8. Top 10 LQs by sub-Region ........................................................................................... 38
Table 5.9. Top LQs by local authority ............................................................................................ 39
Table 6.1. Bay of Connections 2007 sectors ................................................................................. 41
Table 6.2. Key sector industry composition ................................................................................... 43
Table 6.3. FTE employment in key sectors .................................................................................... 46
Table 6.4. GDP in key sectors ....................................................................................................... 47
Table 6.5. Key sector LQs – 1995 and 2010 .................................................................................. 48
Table 6.6. Key Sector Employment LQs by sub-Region, 2010 ....................................................... 49
Table 6.7. Relationships between key regional and national growth sectors and sector strategies 50
Table 7.1. New Zealand employment projections to 2026 .............................................................. 51
Table 7.2. BAU employment projections for Bay of Plenty to 2026 ................................................ 52
Figures
Figure 3.1. New Zealand GDP 1995 to 2010 ................................................................................. 12
Figure 4.1. Population, GDP, Employment and Businesses in the Bay of Plenty region, 2010 ....... 16
Figure 4.2. Population, GDP, Employment and businesses growth, 1994 - 2010 ........................... 18
Figure 5.1. Employment in Bay of Plenty by Industry, 2010 ........................................................... 19
Figure 5.2. FTEs by BOP sub-Region, 2010 .................................................................................. 20
Figure 5.3. Comparison of industry employment by sub-Region .................................................... 21
Figure 5.4. GDP in Bay of Plenty by Industry, 2010 ....................................................................... 22
Figure 5.5. GDP by BOP sub-Region, 2010 .................................................................................. 24
Figure 5.6. Comparison of industry GDP by sub-Region, BOP and New Zealand .......................... 24
Figure 6.1. Key sector employment and GDP in BOP region, 2010 ............................................... 44
Figure 7.1. Bay of Plenty BAU employment projections to 2026 .................................................... 53
Figure 7.2. Rate and level of employment growth .......................................................................... 54
7 Bay of Plenty Economic Profile Bay of Connections
August 2011
2 Introduction
The initial Bay of Connections Strategy “One Region. One Goal. One Future.” was implemented in 2008 as the
economic development strategy for the Bay of Plenty region. A large amount of consideration and consultation
went into the development of the Strategy. The strategy had clear purpose – a vision and a mission – and values
to guide activity. The Strategy had six high level outcomes, identified ten economic opportunities, and nine
guiding principles for strategy implementation. There were four themes based around globally competitive firms,
world class infrastructure and skills, environmental sustainability and innovation and productivity.
All of these components of the strategy remain valid. The purpose of the update to the strategy is not to change
the fundamental underpinnings of the strategy, but to explore what has changed, what is working and how we
might refocus the strategy to build on what has already been done successfully and to continue to work towards
achieving the identified outcomes. Indeed, actions identified in the strategy are still being implemented. Activity
continues in a number of sector strategies such as Aquaculture and Food Cultivation. New sector strategies are
being implemented in Energy, Forestry and Transport & Logistics. Activity is also continuing in the areas of
Broadband & Communications, Labour & Skills, and Māori Economic Development.1
2.1 Approach
In updating the Bay of Connections strategy, the focus is on clarity and simplicity. There will be clarity in that a
clear set of outputs are set as the goal of the strategy. There will be simplicity in that the outputs will be limited to
one key measure and a limited set of secondary measures.
First and foremost this is an economic growth strategy. That is, the end-game is an increase in economic
activity. Second the primary means of achieving or supporting economic growth is through a sector-based
approach. That is supporting and facilitating industry growth in areas where the region has a comparative
advantage and where the industry has national or global growth potential.
It is important to be able to clearly identify the outputs of the strategy and be able to relate them to the action and
measure the change. Our proposal is that the key measure of strategy success is an increase in employment
over and above what would be expected without an intervention. A secondary set of measures can be around
GDP, which can reflect increases in productivity or increased value add. It is these outputs that will allow the
region to achieve economic growth.
Ultimately to bring discipline and clarity to the strategy, there is a need to
a) focus activity into sectors where the region has a strong comparative advantage, and
b) identify clear and achievable (although stretch) targets for those sectors to achieve economic growth
outputs.
Thus, this update concentrates on the 13 areas of focus identified in the initial strategy to review, reconfirm or
refocus efforts.
1 This is not to say that the strategy fundamentals cannot change. These will be reviewed in the next stage of the update to
ensure that they are still consistent with what the region is trying to achieve with the Bay of Connections strategy. However, the focus of this report is on determining the sectors that should be supported through the Strategy.
8 Bay of Plenty Economic Profile Bay of Connections
August 2011
A sector focus does not necessarily mean that non sector focus areas in the current strategy such as labour and
skills, Māori Economic Development, or infrastructure projects (broadband & communications) are dropped.
These are extremely important focus areas for the region and often the actions or outcomes will affect a number
of sectors. The updated approach will consider the role of these non sector focus areas and identify how they
can contribute to each of the sector strategies.
Therefore, this analysis aims to identify those sectors that have the potential to make major contributions to
economic growth in the Bay of Plenty region. The analysis:
provides the context in which these industries operate, in terms of the regional, national and
international environment
looks at the current structure of activity both within the region as well as within New Zealand
compares industry performance, both against other industries, but also relative to the industry in New
Zealand.
From this analysis a set of sectors are identified that can be considered worthy of support to encourage and
enhance their growth.
2.2 A sector-based approach
Ultimately, a regional sector approach will be most successful where it:
is based on a regional capability or comparative advantage
is aligned with nationally competitive sectors
has strong sector buy-in and leadership
has areas/issues where intervention can support transformative growth.
The Ministry of Economic Development has prioritised a number of sectors as key to achieving the government’s
Economic Growth Agenda. These are:
Food & Beverage
Tourism & Major Events
Petroleum & Minerals
ICT
Screen Industry
Government Procurement
Finance Sector
The selection of these sectors is based on a combination of:
high levels of productivity and competitive advantage
significant scale
high rates of export growth
susceptible to government action.
A number of other agencies have considered sectors that have growth potential. These agencies include the
Foundation for Research, Science and Technology, the Ministry of Research, Science and Technology (now
9 Bay of Plenty Economic Profile Bay of Connections
August 2011
combined to form the Ministry of Science and Innovation), Investment New Zealand, and New Zealand Trade and
Enterprise.
A recent report by BERL looking at high growth sectors (BERL, 2010) identified the following groupings of
industry where New Zealand has a competitive advantage in a global market.
Table 2.1. Growth Sectors in New Zealand
Sector Industry areas
Agritech Dairy; Meat; Seafood; Fruit & Vegetables; Wine; Specialty Foods Forestry Silviculture; Wood Processing; Building & Interiors. Infrastructure Infrastructure Biotechnology Agricultural, Industrial; Animal & Human Health; Animal Derived Therapeutics; Natural
Products/Bioactives. Clean Technology Clean Fuels; Clean Materials Novel Materials Plastics; Composites; Metals Creative Sector Screen Production; Television; Music; Design; Publishing; Fashion; Textiles; Digital Content. ICT Productivity Improvement Tools; Data Management Tools. Health & Medical Technologies
Drug Discovery & Delivery Systems; Biomedical/Healthcare Research; Health IT; Diagnostic and Imaging Devices; Assistive and Rehabilitative Devices.
High Value Manufacturing – Software, Electronics, Sensors
High Temperature Superconductors; Specialist Wireless, Mobile Spatial Tracking, Monitoring & Remote Management Technology; Sensing Technologies; Nano-Technologies; Precision Instruments.
Engineering Light & Heavy Engineering Defence Defence Marine Marine Aviation Aviation Education Agriculture, aviation systems, tourism and hospitality.
There is some relationship between these growth sectors and the sectors identified by MED as the focus for the
Economic Growth Agenda.
Not unexpectedly, a number of these sectors have identified a strategy for growth, either through their industry
associations, or with the support of government. Industries that have developed strategies (that we are aware of)
include:
Table 2.2. Some current national sector strategies
Industry Strategy or Industry Analysis
Dairy Strategy for New Zealand Dairy Farming (Dairy New Zealand, 2009) Meat Red Meat Sector Strategy (2011) Seafood The New Zealand Aquaculture Strategy (LECG, 2006) Fruit and Vegetables Growing a New Future (Horticulture New Zealand, 2009) Specialty Foods Leveraging Growth in the Emerging Functional Foods Industry: Trends and Market
Opportunities (PriceWaterhouseCoopers, 2009) Forestry Wood Processing Strategy (2000-2003), Forest Industry Development Agenda (FIDA) Infrastructure National Infrastructure Plan (National Infrastructure Unit, 2010) Biotechnology Driving Economic Growth through Bio-based Industries (NZBIO, 2009)
New Zealand Bioenergy Strategy (Bioenergy Association of New Zealand, 2010) New Zealand Biotechnology Strategy (MORST, 2003)
Clean Technology A Clean Economy Vision for New Zealand in 2025 (PriceWaterhouseCoopers, 2009) Textiles Natural Fibre Export Strategy (New Zealand Textiles Association) Digital Content Digital Strategy 2.0 (Ministry of Economic Development, 2008)
New Zealand Software Development Industry (BearingPoint, 2007) Health and Medical Technologies
Global Lifestyle of Health and Sustainability (Moxie Design Group Ltd, 2008) Review of the Human Therapeutics Industry’s Economic Value to New Zealand (LECG, 2010) The Importance of New Zealand’s Human Therapeutics Sector in Future Economic Growth (NZBIO Health, 2009) In Pursuit of a Global Ambition. Strengthening the New Zealand Medtech Value Chain (NickBar & Associates, 2010)
Aviation New Horizons: A Report on New Zealand’s Aviation Industry (Knotridge Ldt, 2010) Tourism New Zealand Tourism Strategy 2015 (2007) Marine Marine Sector Feasibility Study (2009); NZ Marine Strategic Plan (2010)
10 Bay of Plenty Economic Profile Bay of Connections
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While not exhaustive, the strategies provide evidence that there is significant effort to try to grow particular
sectors. It is important that the Bay of Connections sectors are consistent with nationally competitive sectors, but
also that the sectors themselves are looking to grow. It is this synergy that will allow successful actions, outputs
and outcomes.
While sectors should be aligned to national competitive advantages and a global market, ultimately, the selection
of sectors needs to be based primarily on the region’s comparative advantage. For example, in the case of
Auckland, sectors that have been identified include: high value manufacturing and services – Marine, Health
Technologies, Electronics, Machinery & Equipment, Technical Services, Metals/Metal Products, and Paper
Products; Business Services; Transport Services; Tourism; Processed Food & Beverage; Screen Production;
Export Education.
The identification and selection of these sectors is based on a number of factors including: the share of national
activity, research into Auckland’s areas of advantage and distinctiveness, the contribution to export growth and
value added, New Zealand’s areas of international comparative advantage, the presence of clusters, specific
issues that can be overcome through sector based support.
2.3 Format of the Report
The report is broken down into six sections. Chapter 3 looks at the international and national economy, as well
as global trends, to provide perspective on the economic environment within which the Bay of Plenty operates.
Chapter 4 provides a review of the Bay of Plenty economy, both in 2010 but also over the last 15 years. The
analysis is at a regional level, but also broken down into the three sub-Regions – Western Districts, Eastern
Districts, and Rotorua.
Chapter 5 provides an in-depth industry analysis of the region, looking current and trend activity broken down by
53 industries at a regional and sub-Regional level.
Chapter 6 focuses in on the key sectors, which have been identified through the existing Bay of Connections
strategy, but also incorporating the findings from the previous chapter.
Chapter 7 takes growth in the key sectors over the last 15 years and projects this forward to identify expected
growth in 2026. The analysis is based on a conservative national growth projection where the world economy
grows at 2.9 percent per annum.
11 Bay of Plenty Economic Profile Bay of Connections
August 2011
3 National and International Environment
The Bay of Plenty region does not operate in a vacuum. Activity is influenced by actions within the region. But
what happens within the north island, New Zealand and, indeed, the world, also has a bearing on the ability for
the Bay of Plenty region to enjoy socio-economic success.
Two of the themes noted in the 2008 long-term plan are:
more globally competitive firms in the Bay of Plenty and
world class infrastructure and skills to catalyse economic development.
Both of these themes suggest that the Bay of Plenty region is focusing on being a part of a global economy. The
strategy update needs to be considered in light of the national and international environment.
3.1 International Economy
The key words for international markets over the short and medium term are uncertainty and volatility.
Recent economic outlook reports by both the World Bank and the OECD suggest that, to an extent, the Global
Financial Crisis (GFC) is no longer the main dictator of economic activity in developing countries. Developed
countries, however, are still facing the fallout from the GFC, with the OECD identifying the key challenges being:
dealing with high unemployment and preventing it from becoming entrenched; sustaining growth and avoiding
stagnation; progressing fiscal consolidation; and managing global imbalances.
The effects of the earthquake and tsunami in Japan, and the political turmoil in the Middle-East and North Africa
have contributed to a modest slowing in global industrial production and trade.
More recently, issues around the US economy and European debt has seen global sharemarket falls similar to
2008 with some commentators suggesting a double dip recession for the world economy.
As always, the consensus going forward is for solid growth led by developing countries. Downside risks are
posed by high food prices, possible additional oil-price spikes and lingering post-crisis difficulties in high-income
countries.
The latest GDP forecasts from the World Bank suggest that GDP Growth will decline slightly over 2011 to3.2
percent before rising again to 3.6 percent in 2012 and 2013. Growth in Developing countries however, is
expected to be around 6.3 percent to 2013. The OECD expects GDP growth in the OECD area to be 2.3 percent
in 2011, increasing to 2.8 percent in 2012.
BERL has assumed that world GDP growth will average 2.9 percent per annum over the scenario period to 2026.
This is consistent with the above forecasts albeit slightly down on the world historical growth performance over
time. The reason a conservative estimate of world growth has been applied is the definite downside risk of the
fallout from the GFC, possibility of further spikes in oil prices, and rapidly rising commodity and food prices.
In any respect, we can expect continued change in capital markets and the availability of investment capital.
Both how it is allocated (regulation) but where it is allocated into the future.
12 Bay of Plenty Economic Profile Bay of Connections
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3.2 National Economy
The New Zealand economy has the
potential to benefit from the current
escalation in commodity prices and
indeed food prices, particularly as
agricultural products account for a
significant proportion of our exports. Oil
has passed Wood again to become our
third largest export after Dairy and Meat.
If further discoveries are found it isn’t
difficult to envisage oil becoming our
largest export industry by the end of the
scenario period.
The effect of the Christchurch earthquakes will be played out over the next five to ten years. In 2010, Canterbury
accounted for around nine percent of New Zealand GDP and FTE employment. However, it is about forty
percent of the South Island economy. It is the major city and is a major facilitator of a number of industries and
activity including ICT and tourism. If, how, and when it recovers will have a significant bearing on New Zealand’s
economic performance going forward. In the short term, however, it will be sucking up a large level of resources,
which will result in economic activity over the next five to ten years.
The two key factors affecting New Zealand's growth opportunities are global growth and access to markets,
particularly as New Zealand is primarily an export-focused economy reliant on international trade for growth.
Tied into this scenario, demand for commodities and food is also key to higher growth considering our current
industry structure and comparative advantages. Finally exchange rate volatility will impact on New Zealand’s
ability to compete, particularly in the price driven commodity market.
Issues arise around sustainability and environmental issues, with areas such as water, mining, energy supply
and resource management being potential opportunities or threats to growth.
In terms of the New Zealand economy, BERL expects real GDP growth to average 2.6 percent to 2026. This is
slightly lower than the average growth over the last 15 years of 2.75 percent but is predicated on having to
recover from the recent recession.
3.3 Global Megatrends
Finally, there are a number of trends that are occurring globally that will impact on how we do things and what will
be demanded from consumers in the future. In several cases these trends support the key sectors in the Bay of
Plenty region, but also provide focus for sector strategies going forward.
People are ageing, on the move, and demanding more
In general, the world is getting older, hungrier, more demanding, and more mobile. The populations of OECD
countries are ageing and experiencing lifestyle and diet related health problems. At the same time there are high
fertility rates and problems of not enough food for millions in poor countries.
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
source: BERL Regional Database 2010
Figure 3.1. New Zealand GDP 1995 to 2010
13 Bay of Plenty Economic Profile Bay of Connections
August 2011
This creates a number of issues around how we support an aging population, but also creates an opportunity
around how we interact and benefit from an older population that in many cases can continue to operate
effectively and contribute to an economy where there is a premium on knowledge, and physical ability does not
matter as much.
As well, the workforce is increasingly mobile. As noted by CSIRO “People are changing jobs and careers more
often, moving house more often, commuting further to work and travelling around the world more often.”
Within this, is a desire by people to live in a high amenity value community where they can enjoy “experiences”.
This is driven by changes where people are increasingly resource rich but time poor, and where the type of jobs
and technology is enabling work and life to overlap. They are also becoming more sophisticated consumers
demanding more personalised products and services. Growth of the services sector of western economies is
being followed by a second wave of innovation aimed at tailoring and targeting services.
There is a continuing trend towards Mega Cities, Mega Regions, Mega Corridors and, with accelerating
technological change and E-Mobility. With all these changes in technology and the more sophisticated, mobile
worker/consumer, there is a need for cities to be smart and connected globally.
The environment matters more
There are increasingly severe consequences of climate change and (arguably) an increasing number (or impact
due to increasing built environment) of natural disasters – Earthquakes, Tsunami, Flooding, Volcanic eruptions.
As well there is an increasing environmental pollution load as a result of increased population, consumption and
waste. This can create opportunity for the smart use of sustainable resources and building materials (such as
wood products).
Globally, natural resources are being used up unsustainably, led by increasing demand for those resources
through economic and population growth. Coming decades will see an increasing focus on resource use
efficiency. This creates demand for green energy (such as geothermal) and more efficient and innovative food
production such as farmed seafood and traceability.
Water is becoming increasingly scarce and will be an extremely important commodity going forward (as it is
currently). Sustainable water use as well as its storage, allocation and application will be important issues for
New Zealand.
14 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 3.1. Global megatrends – some examples
CSIRO (2010) Frost & Sullivan (2011) EEA (2010)
More from Less – a world of limited resources. This relates to
the world’s depleting natural resources and increasing demand
for those resources through economic and population growth.
Coming decades will see an increasing focus on resource use
efficiency.
A personal touch – Personalisation of products and services.
Growth of the services sector of western economies is being
followed by a second wave of innovation aimed at tailoring and
targeting services.
Divergent demographics – older, hungry and more demanding.
The populations of OECD countries are ageing and
experiencing lifestyle and diet related health problems. At the
same time there are high fertility rates and problems of not
enough food for millions in poor countries.
On the Move – Urbanising and increased mobility. People are
changing jobs and careers more often, moving house more
often, commuting further to work and travelling around the
world more often.
iWorld – Digital and natural convergence. Everything in the
natural world will have a digital counterpart. Computing power
and memory storage are improving rapidly. Many more
devices are getting connected to the internet.
Urbanisation: Mega Cities, Mega Regions, Mega Corridors,
Smart Cities
E-Mobility
Social Trends: Geo Socialisation, Generation Y
SPACE JAM: Congested Satellite Orbits
Future Robotic Technology
Virtual World: Fluid Interfaces and Haptic Technology
Innovating to Zero!
Social: Increasing global divergence in population trends;
Living in an urban world; Disease burdens and the risk of new
pandemics
Technological: Accelerating technological change: racing into
the unknown
Economical: Continued economic growth; From a uni-polar to
a multi-polar world; Intensified global competition for resources
Environmental: Decreasing stocks of natural resources;
Increasingly severe consequences of climate change;
Increasing environmental pollution load
Political: Environmental regulation and governance: increasing
fragmentation and convergence
15 Bay of Plenty Economic Profile Bay of Connections
August 2011
4 Bay of Plenty Economy
In 2010, the Bay of Plenty region has an estimated population of 270,400, accounting for six percent of
New Zealand’s population. The Bay of Plenty region generates $10.17 billion in GDP, five percent of
New Zealand’s total GDP. With 104,800 FTEs, it accounts for six percent of New Zealand’s
employment. There are 34,100 businesses in the Bay of Plenty region, accounting for seven percent of
all businesses in New Zealand.
Even within the Bay of Plenty region, industry activity is localised.2 Where required we have also looked
at the analysis by the six districts. This is particularly the case in the area of location quotient analysis.
To allow more accurate identification of activity, we have broken the region into three sub-Regions. The
groupings of region, sub-Region and Districts is shown in Table 4.1.
Table 4.1. Regional Structure
Region Sub-Region Local Authority
Bay of Plenty region
Western Districts
Tauranga
Western Bay of Plenty
Rotorua Rotorua
Eastern Districts
Whakatane
Kawerau
Ōpōtiki
Breaking the analysis down into the three sub-regions (see Figure 4.1), the Western Districts account for
57 percent of the Bay of Plenty region’s population and GDP; and 58 percent of its employment.
Rotorua accounts for 25 percent of the Region’s population; 26 percent of its employment; and 27
percent of its GDP. The Eastern Districts accounts for 18 percent of the Region’s population; and 16
percent of its employment and GDP.
2 For example, tourism in Rotorua, Kiwifruit production in Tauranga/Western Bay of Plenty, Forestry in Kawerau and
so forth.
16 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 4.1. Population, GDP, Employment and Businesses in the Bay of Plenty region, 2010
Table 4.2 presents the key economic indicators for the sub-Regions, the Bay of Plenty region and New
Zealand as at March 2010.
Table 4.2. Key Economic Indicators
GDP per capita and GDP per FTE are lower in the Bay of Plenty region than nationally. GDP per capita
of $37,600 is 84 percent of national GDP per capita, and GDP per FTE of $89,775 is 95 percent of
national GDP per FTE.
GDP per capita and GDP per FTE are lower in each sub-Region than nationally. However, they are
highest in Rotorua. Eastern Districts has the lowest GDP per capita, which is likely a reflection of the
New Zealand, 4,204,945, 94%
Western Districts, 155,256, 3%
Rotorua, 66,395, 2%
Eastern Districts, 48,755, 1%BOP, 270,406, 6%
Population
source: BERL Regional Database, 2010
New Zealand, $187,802, 95%
Western Districts, $5,792, 3%
Rotorua, $2,725, 1%
Eastern Districts, $1,658, 1%BOP, 270,406, 6%
GDP ($m)
source: BERL Regional Database, 2010
New Zealand, 1,835,706, 95%
Western Districts, 60,634, 3%
Rotorua, 26,994, 1%
Eastern Districts, 17,129, 1%BOP, 270,406, 6%
FTEs
source: BERL Regional Database, 2010
New Zealand, 505,685, 94%
Western Districts, 21,645, 4%
Rotorua, 7,147, 1%
Eastern Districts, 5,354, 1%BOP, 270,406, 6%
Businesses
source: BERL Regional Database, 2010
Key Economic Indicators
(2010)Western Districts Rotorua Eastern Districts
Bay of Plenty
RegionNew Zealand
Population 155,256 66,395 48,755 270,406 4,204,945
GDP ($m) $5,792 $2,725 $1,658 $10,175 $187,802
FTEs 60,634 26,994 17,129 104,757 1,835,706
GDP per Capita $37,303 $41,049 $34,000 $37,627 $44,662
GDP per FTE $88,287 $93,324 $89,451 $89,775 $94,559
Businesses 21,645 7,147 5,354 34,146 505,685
Business Size 2.8 3.8 3.2 3.1 3.6
Source: BERL Regional Database 2010
17 Bay of Plenty Economic Profile Bay of Connections
August 2011
high proportion of the population not in the work-force; and Western Districts has the lowest GDP per
FTE, which is due to relatively higher employment in lower value added industries.
Businesses in the Bay of Plenty region, with an average of 3.1 FTEs, are smaller than nationally, where
the average business has 3.6 FTEs. However, businesses in Rotorua are larger than nationally, with an
average business size of 3.8 FTEs.
The economic performance of the Region is considered over the short, medium and longer term. Table
4.3 shows the growth in the key economic indicators over three periods – one year, 10 years and 15
years.
Table 4.3. Growth in Key Economic Indicators
The Region has not performed as well as nationally across all indicators in the latest year. Considering
the greater focus of the region on exports, the effect of the recession needs to be factored into the
analysis, particularly over the latest two periods.
In general the Region has tended to perform slightly better than nationally over the longer terms (10 and
Western
DistrictsRotorua
Eastern
DistrictsBOP region
New
Zealand
Resident population growth 1.5 0.6 0.1 1.0 1.2
Real Value Added (GDP) growth -1.7 0.3 -1.8 -1.2 -0.4
Employment growth (FTEs) -1.9 -1.7 -2.2 -1.9 -1.7
GDP per capita growth -3.1 -0.3 -1.9 -2.2 -1.6
Labour productivity growth 0.1 1.9 0.3 0.6 1.1
Business units growth -1.5 -2.5 -2.0 -1.8 -1.3
Resident population growth 2.0 0.3 -0.1 1.2 1.2
Real Value Added (GDP) growth 3.1 1.5 2.0 2.5 2.3
Employment growth (FTEs) 2.9 0.8 1.5 2.1 1.9
GDP per capita growth 1.1 1.3 2.1 1.3 1.1
Productivity growth 0.2 0.9 0.6 0.5 0.5
Business units growth 3.0 0.8 1.1 2.2 2.2
Resident population growth 2.6 0.2 0.0 1.4 1.3
Real Value Added (GDP) growth 3.7 1.5 1.6 2.7 2.6
Employment growth (FTEs) 3.1 0.7 1.0 2.1 1.6
GDP per capita growth 1.0 1.3 1.6 1.2 1.3
Productivity growth 0.7 0.9 0.7 0.7 1.1
Business units growth 3.8 1.3 1.6 2.8 2.6
Source: BERL Regional Database 2010
%pa for 1995 - 2010
Key Performance Indicators
%pa for 2010 year
%pa for 2000 - 2010
18 Bay of Plenty Economic Profile Bay of Connections
August 2011
15 years) although change has been relatively consistent with national.
As the line graphs in Figure 4.2 show, the majority of growth has occurred in the Western Districts. Both
Rotorua and the Eastern Districts have not performed as well as nationally. However, because the
composition of the Bay of Plenty region economy is skewed due to the size of the Western Districts,
stellar performance in the Western Districts has tended to pull the Bay of Plenty region performance up.
Figure 4.2. Population, GDP, Employment and businesses growth, 1994 - 2010
Eastern Districts and Rotorua have tended to perform below the New Zealand average over the longer
term. The greatest contrasts in performances are around population growth and business growth.
The most marked variation has been in population, where growth in the Western Districts has been at
double the national average, whereas population numbers in Rotorua and the Eastern Districts have
remained constant to falling.
800
900
1000
1100
1200
1300
1994
19
95
1996
1997
19
98
1999
2000
2001
20
02
2003
2004
20
05
2006
2007
2008
2009
2010
ind
ex
20
00
= 1
00
0
PopulationRotorua Western Districts
Eastern Districts Bay of Plenty Region
New Zealand
source: BERL Regional Database, 2010
600
800
1000
1200
1400
1600
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
ind
ex
20
00
= 1
00
0
GDPRotorua Western DistrictsEastern Districts Bay of Plenty RegionNew Zealand
source: BERL Regional Database, 2010source: BERL Regional Database, 2010
600
800
1000
1200
1400
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
ind
ex
20
00
= 1
00
0
FTEs
Rotorua Western DistrictsEastern Districts Bay of Plenty RegionNew Zealand
source: BERL Regional Database, 2010
600
800
1000
1200
1400
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ind
ex
20
00
= 1
00
0business units
Rotorua Western DistrictsEastern Districts Bay of Plenty Region
source: BERL Regional Database, 2010
19 Bay of Plenty Economic Profile Bay of Connections
August 2011
5 Industry Analysis
This section provides a detailed analysis of the sectors and industries that contribute to the Bay of
Plenty economy. Industry activity by employment is split broadly across 477 industries as defined by
ANZSIC (Australia New Zealand Standard Industrial Classification 1996). At the more aggregated 53
industry and 17 industry levels, BERL has been able to estimate the contribution of industries to GDP.
Our analysis looks at current and trend (1995 to 2010) employment and GDP contributions at the 17 and
53 industry level by sub-Region, Region and national groupings.
5.1 Employment
Figure 5.1 shows employment in the Bay of Plenty region in 2010 broken down by 17 sectors.
Figure 5.1. Employment in Bay of Plenty by Industry, 2010
The biggest employer in the region is the primary sector (Agriculture, Forestry & Fishing), which
accounted for 14 percent of employment in the economy. Retail Trade accounted for 12 percent of
employment, followed by Manufacturing and Property & Business Services (both 11 percent) and Health
& Community Services (10 percent).
The sector employment pattern in the Bay of Plenty region is relatively consistent with national
employment, although the region has relatively higher employment in the Agriculture, Forestry & Fishing
industry and relatively lower employment in the Finance & Business Services Sector.
Ag, Forestry & Fishing; 15,116; 14%
Mining; 144; 0%
Manufacturing; 11,942; 11%
Elect, Gas & Water
Supply; 419; 0%
Construction; 8,457; 8%
Wholesale Trade; 5,535; 5%
Retail Trade; 12,561; 12%
Accom, Cafes & Restaurants; 5,291;
5%
Transport & Storage; 4,165; 4%
Communication Services; 860; 1%
Finance & Insurance; 1,807; 2%
Prop & Business Services; 11,203;
11%
Govt Admin & Defence; 2,594;
2%
Education; 7,555; 7%
Health & Comm'y Services; 10,833;
10%
Cultural & Rec Services; 2,763; 3%
Personal & Other Services; 3,511;
3%
Bay of Plenty
source: BERL Regional Database, 2010
20 Bay of Plenty Economic Profile Bay of Connections
August 2011
However, the variance in employment becomes much higher when we consider the sub-Regions.
Figure 5.2 shows the absolute employment in each sector broken down by sub-Region.
Figure 5.2. FTEs by BOP sub-Region, 2010
As expected, the Western Districts account for the largest absolute employment in each sector apart
from Cultural & Recreational Services. Rotorua employs almost as many FTEs as the Western Districts
in the Accommodation, Cafes & Restaurants Industry. This reflects the importance of tourism to
Rotorua.
The relative importance of sectors to the sub-Regions is clearer in Figure 5.3, which shows the
proportion of employment in each sector to total employment in that sector. The sub-Region analysis is
also compared to the wider Bay of Plenty region and New Zealand.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
FTEs
Western Districts Rotorua Eastern Districts
source: BERL Regional Database, 2010
21 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 5.3. Comparison of industry employment by sub-Region
Agriculture, Forestry & Fishing is strongest in the Eastern and Western Districts. Agriculture, Forestry &
Fishing accounts for 45 percent of employment in both the Ōpōtiki and Western Bay of Plenty Districts.
Within Kawerau District, however, Agriculture, Forestry & Fishing accounts for less than two percent of
employment.
Manufacturing is strongest in the Eastern Districts, driven by Kawerau District, where the Manufacturing
sector accounts for half of all employment. In contrast, Manufacturing accounts for less than two
percent of employment in the Ōpōtiki District.
The Accommodation, Cafes & Restaurants sector accounts for over eight percent of employment in
Rotorua, compared to 4.7 percent nationally. Similarly, Culture & Recreational Services accounts for
over five percent of employment in Rotorua compared to 2.8 percent nationally.
The Bay of Plenty region as a whole, and across all sub-Regions, has a low proportion of employment in
the Finance & Insurance, and Government Administration & Defence sectors.
5.2 GDP
The flow through of employment to GDP is slightly different due to the value added per FTE in the
different industries, as shown in Figure 5.4.
Rotorua
Western Districts
Eastern Districts
Bay of Plenty
New Zealand
0%
5%
10%
15%
20%
25%
FTEs
source: BERL Regional Database, 2010
22 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 5.4. GDP in Bay of Plenty by Industry, 2010
The Property & Business Services sector is the largest contributor to GDP, accounting for 22 percent.
Manufacturing is the second largest sector at 14 percent; followed by Agriculture, Forestry & Fishing at
13 percent.
Again, the Western Districts stand out in terms of contribution, particularly in the Property & Business
Services Industry. The absolute sector contributions to GDP by sub-Region are shown in
Ag, Forestry & Fishing; 1,294; 13%
Mining; 33; 0%
Manufacturing; 1,411; 14%
Elect, Gas & Water
Supply; 211; 2%
Construction; 475; 5%
Wholesale Trade; 616; 6%
Retail Trade; 718; 7%
Accom, Cafes &
Restaurants; 174; 2%
Transport & Storage; 456; 4%Communication
Services; 423; 4%
Finance & Insurance; 472; 5%
Prop & Business Services; 2,219; 22%
Govt Admin & Defence; 335; 3%
Education; 366; 4%
Health & Comm'y Services; 671; 7% Cultural & Rec
Services; 162; 2%
Personal & Other Services; 139; 1%
Bay of Plenty
source: BERL Regional Database, 2010
23 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 5.5.
24 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 5.5. GDP by BOP sub-Region, 2010
Western Districts is the largest contributor to GDP in all sectors apart from Cultural & Recreational
Services, where Rotorua contributes slightly more. As well the difference between the Western Districts
and Rotorua is small in the Accommodation, Cafes & Restaurants Sector.
The relative importance of industry GDP to each sub-Region is shown in Figure 5.6.
Figure 5.6. Comparison of industry GDP by sub-Region, BOP and New Zealand
0
100
200
300
400
500
600
700
800
GD
P (
$m
)Western Districts Rotorua Eastern Districts
source: BERL Regional Database, 2010
$1,341m
Western Districts
Rotorua
Eastern Districts
Bay of Plenty
New Zealand
0%
5%
10%
15%
20%
25%
GD
P
source: BERL Regional Database, 2010
25 Bay of Plenty Economic Profile Bay of Connections
August 2011
The importance of Property & Business Services, Agriculture, Forestry & Fishing and Manufacturing is
apparent across all sub-Regions. Of particular note is the relative importance of Agriculture, Forestry &
Fishing, and Manufacturing to the Eastern Districts.
In Rotorua, the Cultural & Recreational Services and Accommodation, Cafes & Restaurants sectors
stand out. In the Western Districts, the Transport & Storage sector accounts for a significantly higher
proportion of GDP than in other jurisdictions.
5.3 Largest and fastest growing industries
Analysis of the largest and fastest growing industries is at a more detailed level, where the sectors are
broken down even further into 53 industries. This allows for even more detailed analysis of activity and
performance. The analysis of largest and fastest growing industries is by FTE only.
5.3.1 Largest industries
26 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.1 and
27 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.2 show the largest industries by employment and by GDP for the Bay of Plenty region and sub-
Regions in 2010 and also in 1995. New Zealand is also shown for comparative purposes.
28 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.1. Largest industries by employment by sub-Region, 2010 and 1995
2010 2010 1995
Business Services
Accommodation, Cafes
and Restaurants
Education
Health Services
Agriculture
Personal and Household
Good Retailing
Wood and Paper
Product Manufacturi
ng
Construction Trade
Services
Sport and Recreation
Food Retailing
other; 11,153; 41%
Rotorua
source: BERL Regional Database, 2010
Rotorua FTEs
Business Services 2,447 9.1%
Accommodation, Cafes and Restaurants 2,275 8.4%
Education 2,164 8.0%
Health Services 2,081 7.7%
Agriculture 1,381 5.1%
Personal and Household Good Retailing 1,221 4.5%
Wood and Paper Product Manufacturing 1,130 4.2%
Construction Trade Services 1,121 4.2%
Sport and Recreation 1,019 3.8%
Food Retailing 1,003 3.7%
Forestry and Logging 879 3.3%
General Construction 806 3.0%
Motor Vehicle Retailing and Services 770 2.9%
Community Services 713 2.6%
Road Transport 663 2.5%
Rotorua FTEs
Accommodation, Cafes and Restaurants 1,922 7.9%
Education 1,830 7.6%
Business Services 1,663 6.9%
Health Services 1,477 6.1%
Agriculture 1,471 6.1%
Personal and Household Good Retailing 1,293 5.3%
Wood and Paper Product Manufacturing 1,286 5.3%
Forestry and Logging 1,000 4.1%
Government Administration 991 4.1%
Food Retailing 943 3.9%
Motor Vehicle Retailing and Services 886 3.7%
Construction Trade Services 837 3.5%
Food, Beverage and Tobacco 711 2.9%
Road Transport 608 2.5%
General Construction 588 2.4%
Business Services Health
Services Services to Agriculture; Hunting and
Trapping
Agriculture
Education
Personal and Household
Good RetailingConstruction
Trade Services
Food RetailingAccommodat
ion, Cafes and
Restaurants
General Construction
other; 24,458; 40%
Western Districts
source: BERL Regional Database, 2010
Western Districts FTEs
Business Services 5,566 9.2%
Health Services 4,530 7.5%
Services to Agriculture; Hunting and Trapping 4,520 7.5%
Agriculture 4,301 7.1%
Education 3,663 6.0%
Personal and Household Good Retailing 3,316 5.5%
Construction Trade Services 3,128 5.2%
Food Retailing 2,516 4.1%
Accommodation, Cafes and Restaurants 2,424 4.0%
General Construction 2,213 3.6%
Community Services 1,868 3.1%
Food, Beverage and Tobacco 1,863 3.1%
Motor Vehicle Retailing and Services 1,685 2.8%
Road Transport 1,436 2.4%
Property Services 1,414 2.3%
Western Districts FTEs
Agriculture 4,426 11.6%
Business Services 2,224 5.8%
Personal and Household Good Retailing 2,182 5.7%
Health Services 2,044 5.3%
Education 2,031 5.3%
Food Retailing 1,761 4.6%
General Construction 1,735 4.5%
Construction Trade Services 1,730 4.5%
Food, Beverage and Tobacco 1,574 4.1%
Motor Vehicle Retailing and Services 1,477 3.9%
Accommodation, Cafes and Restaurants 1,175 3.1%
Machinery and Equipment Manufacturing 1,145 3.0%
Property Services 1,121 2.9%
Government Administration 944 2.5%
Road Transport 939 2.5%
AgricultureEducation
Wood and Paper
Product Manufacturi
ng
Health Services
Business Services
Services to Agriculture; Hunting and
Trapping
Food Retailing
Personal and Household
Good Retailing
Construction Trade
ServicesAccommodat
ion, Cafes and
Restaurants
other; 6,043; 35%
Eastern Districts
source: BERL Regional Database, 2010
Eastern Districts FTEs
Agriculture 2,282 13.3%
Education 1,728 10.1%
Wood and Paper Product Manufacturing 1,262 7.4%
Health Services 1,207 7.0%
Business Services 916 5.3%
Services to Agriculture; Hunting and Trapping 862 5.0%
Food Retailing 782 4.6%
Personal and Household Good Retailing 730 4.3%
Construction Trade Services 722 4.2%
Accommodation, Cafes and Restaurants 593 3.5%
Other Services 593 3.5%
Motor Vehicle Retailing and Services 539 3.1%
Government Administration 525 3.1%
Machinery and Equipment Manufacturing 519 3.0%
Food, Beverage and Tobacco 469 2.7%
Eastern Districts FTEs
Agriculture 2,193 14.8%
Wood and Paper Product Manufacturing 2,094 14.1%
Education 1,258 8.5%
Forestry and Logging 819 5.5%
Health Services 808 5.5%
Personal and Household Good Retailing 770 5.2%
Business Services 608 4.1%
Motor Vehicle Retailing and Services 560 3.8%
Food Retailing 549 3.7%
Construction Trade Services 532 3.6%
Machinery and Equipment Manufacturing 502 3.4%
Accommodation, Cafes and Restaurants 422 2.8%
Government Administration 408 2.8%
General Construction 386 2.6%
Road Transport 304 2.1%
Business Services
Agriculture
Health Services
Education
Services to Agriculture; Hunting and
Trapping
Accommodation, Cafes
and Restaurants
Personal and Household
Good RetailingConstruction
Trade Services
Food RetailingGeneral
Construction
other; 43,653; 42%
Bay of Plenty
source: BERL Regional Database, 2010
Bay of Plenty FTEs
Business Services 8,930 8.5%
Agriculture 7,964 7.6%
Health Services 7,818 7.5%
Education 7,555 7.2%
Services to Agriculture; Hunting and Trapping 5,521 5.3%
Accommodation, Cafes and Restaurants 5,291 5.1%
Personal and Household Good Retailing 5,267 5.0%
Construction Trade Services 4,971 4.7%
Food Retailing 4,301 4.1%
General Construction 3,486 3.3%
Wood and Paper Product Manufacturing 3,154 3.0%
Community Services 3,015 2.9%
Motor Vehicle Retailing and Services 2,993 2.9%
Food, Beverage and Tobacco 2,871 2.7%
Machinery and Equipment Manufacturing 2,429 2.3%
Bay of Plenty FTEs
Agriculture 8,090 10.5%
Education 5,119 6.6%
Business Services 4,494 5.8%
Health Services 4,330 5.6%
Wood and Paper Product Manufacturing 4,256 5.5%
Personal and Household Good Retailing 4,245 5.5%
Accommodation, Cafes and Restaurants 3,519 4.6%
Food Retailing 3,254 4.2%
Construction Trade Services 3,099 4.0%
Motor Vehicle Retailing and Services 2,923 3.8%
General Construction 2,709 3.5%
Food, Beverage and Tobacco 2,408 3.1%
Government Administration 2,343 3.0%
Machinery and Equipment Manufacturing 2,205 2.9%
Forestry and Logging 2,109 2.7%
Business Services
Education
Health Services
Agriculture
Personal and Household
Good Retailing
Accommodation, Cafes
and Restaurants
Construction Trade
Services
Food Retailing
Food, Beverage
and Tobacco
Government Administrati
on
other; 796,453; 43%
New Zealand
source: BERL Regional Database, 2010
New Zealand FTEs
Business Services 225,269 12.3%
Education 128,603 7.0%
Health Services 124,290 6.8%
Agriculture 111,206 6.1%
Personal and Household Good Retailing 86,861 4.7%
Accommodation, Cafes and Restaurants 86,072 4.7%
Construction Trade Services 78,703 4.3%
Food Retailing 70,464 3.8%
Food, Beverage and Tobacco 65,139 3.5%
Government Administration 62,646 3.4%
General Construction 59,244 3.2%
Community Services 54,197 3.0%
Personal and Household Good Wholesaling 49,076 2.7%
Other Services 45,358 2.5%
Motor Vehicle Retailing and Services 43,498 2.4%
New Zealand FTEs
Agriculture 118,187 8.2%
Business Services 111,071 7.7%
Education 96,352 6.7%
Health Services 77,123 5.4%
Personal and Household Good Retailing 75,339 5.2%
Food, Beverage and Tobacco 60,537 4.2%
Accommodation, Cafes and Restaurants 57,476 4.0%
Food Retailing 55,445 3.8%
Government Administration 50,796 3.5%
Construction Trade Services 47,714 3.3%
Machinery and Equipment Manufacturing 46,519 3.2%
Motor Vehicle Retailing and Services 43,490 3.0%
General Construction 41,157 2.9%
Personal and Household Good Wholesaling 40,561 2.8%
Machinery and Motor Vehicle Wholesaling 33,499 2.3%
29 Bay of Plenty Economic Profile Bay of Connections
August 2011
Business Services
Consistent with New Zealand, Business Services is the largest industry by employment in Rotorua and
Western Districts, as well as the Bay of Plenty region as a whole. However, the proportion of
employment is lower than nationally (around nine percent vs. 12.3 percent nationally). Employment in
Business Services is relatively low in the Eastern Districts at 5.3 percent.
Agriculture
Agriculture is the largest industry in the Eastern Districts and the fourth and fifth largest in Rotorua and
the Western Districts respectively, making it the second largest industry by employment in the Bay of
Plenty region. Nationally, Agriculture is the fourth largest employer at 6.1 percent. Employment in
agriculture is above the national average in the Eastern and Western Districts, but below the national
average in Rotorua District. In 1995, Agriculture was the largest industry in terms of employment within
two of the three sub-Regions, the Bay of Plenty region, and Nationally. In 2010, only the Eastern
Districts has Agriculture as the largest employer.
The obvious change in industry composition has been the relative employment in Agriculture across all
sub-Regions, the Region and Nationally. This has not necessarily seen an absolute decline in
agricultural employment but more an increase in employment in other industries (such as Business
Services) and a change in how agricultural employment is classified (for example, in Services to
Agriculture, Hunting & Trapping).
Accommodation, Cafes & Restaurants
In 2010, Accommodation, Cafes & Restaurants is the second largest industry in Rotorua accounting for
8.9 percent of total employment. It is only the ninth largest employer in the Western Districts and the
tenth largest employer in the Eastern Districts. Combining the results, Accommodation, Cafes &
Restaurants accounts for 5.1 percent of employment, making it the sixth largest employer in the Bay of
Plenty region. Nationally, Accommodation, Cafes & Restaurants account for 4.7 percent of
employment, also the sixth largest employer.
In1995, Accommodation, Cafes & Restaurants was the largest employer in Rotorua and so has dropped
one position. This is in spite of its relative employment in the industry increasing to 8.4 percent from 7.9
percent. The reason behind this is the faster growth in Business Services. Relative employment in the
Accommodation, Cafes & Restaurants industry has increased between 1995 and 2010 in all sub-
Regions, the Bay of Plenty region and nationally reflecting the growth in this sector.
30 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.2. Largest Industries by GDP by sub-Region, 2010 and 1995
2010 2010 1995
Property Services
Forestry and Logging
Business Services
Wood and Paper
Product Manufacturin
g
Health Services
Education
Agriculture
FinanceGovernment Administratio
n
Communication Services
other; 1,022; 37%
Rotorua
source: BERL Regional Database, 2010
Rotorua GDP, 2010$m
Property Services 403 14.8%
Forestry and Logging 301 11.0%
Business Services 192 7.0%
Wood and Paper Product Manufacturing 181 6.6%
Health Services 155 5.7%
Education 107 3.9%
Agriculture 105 3.9%
Finance 90 3.3%
Government Administration 85 3.1%
Communication Services 84 3.1%
Accommodation, Cafes and Restaurants 75 2.7%
Food, Beverage and Tobacco 69 2.5%
Machinery and Motor Vehicle Wholesaling 68 2.5%
Personal and Household Good Retailing 68 2.5%
Sport and Recreation 60 2.2%
Rotorua GDP, 2010$m
Property Services 366 16.8%
Forestry and Logging 178 8.2%
Business Services 133 6.1%
Wood and Paper Product Manufacturing 129 5.9%
Government Administration 109 5.0%
Education 104 4.7%
Health Services 99 4.6%
Agriculture 83 3.8%
Food, Beverage and Tobacco 81 3.7%
Accommodation, Cafes and Restaurants 69 3.2%
Communication Services 58 2.7%
Finance 58 2.7%
Machinery and Motor Vehicle Wholesaling 56 2.5%
Personal and Household Good Retailing 53 2.4%
Basic Material Wholesaling 52 2.4%
Property Services
Business Services
Health Services
Agriculture
Communication Services
Food, Beverage
and Tobacco
Finance
Personal and Household
Good Retailing
EducationServices to Agriculture; Hunting and
Trapping
other; 2,478; 43%
Western Districts
source: BERL Regional Database, 2010
Western Districts GDP, 2010$m
Property Services 904 15.6%
Business Services 436 7.5%
Health Services 336 5.8%
Agriculture 329 5.7%
Communication Services 317 5.5%
Food, Beverage and Tobacco 240 4.1%
Finance 222 3.8%
Personal and Household Good Retailing 183 3.2%
Education 180 3.1%
Services to Agriculture; Hunting and Trapping 165 2.8%
Construction Trade Services 162 2.8%
Government Administration 160 2.8%
Services to Transport 156 2.7%
Electricity and Gas Supply 155 2.7%
Basic Material Wholesaling 143 2.5%
Western Districts GDP, 2010$m
Property Services 629 18.7%
Agriculture 249 7.4%
Food, Beverage and Tobacco 179 5.3%
Business Services 177 5.3%
Health Services 137 4.1%
Education 118 3.5%
Government Administration 104 3.1%
General Construction 100 3.0%
Finance 96 2.9%
Construction Trade Services 95 2.8%
Electricity and Gas Supply 90 2.7%
Personal and Household Good Retailing 89 2.6%
Basic Material Wholesaling 88 2.6%
Communication Services 88 2.6%
Wood and Paper Product Manufacturing 88 2.6%
Property Services
Wood and Paper
Product Manufacturi
ng
Agriculture
Forestry and Logging
Health Services
Education
Business ServicesGovernment
Administration
Food, Beverage
and Tobacco
Finance
other; 528; 32%
Eastern Districts
source: BERL Regional Database, 2010
Eastern Districts GDP, 2010$m
Property Services 212 12.8%
Wood and Paper Product Manufacturing 202 12.2%
Agriculture 174 10.5%
Forestry and Logging 111 6.7%
Health Services 90 5.4%
Education 79 4.7%
Business Services 72 4.3%
Government Administration 70 4.2%
Food, Beverage and Tobacco 60 3.6%
Finance 60 3.6%
Electricity and Gas Supply 42 2.6%
Personal and Household Good Retailing 40 2.4%
Food Retailing 40 2.4%
Machinery and Equipment Manufacturing 39 2.4%
Construction Trade Services 37 2.3%
Eastern Districts GDP, 2010$m
Wood and Paper Product Manufacturing 210 16.0%
Property Services 191 14.6%
Forestry and Logging 146 11.1%
Agriculture 123 9.4%
Education 70 5.3%
Health Services 54 4.1%
Business Services 48 3.7%
Government Administration 45 3.4%
Electricity and Gas Supply 36 2.7%
Machinery and Equipment Manufacturing 32 2.5%
Personal and Household Good Retailing 31 2.4%
Construction Trade Services 29 2.2%
Finance 29 2.2%
Motor Vehicle Retailing and Services 24 1.9%
Food Retailing 23 1.7%
Property Services
Business Services
Agriculture
Health Services
Wood and Paper
Product Manufacturi
ng
Forestry and Logging
Communication Services
FinanceFood, Beverage
and Tobacco
Education
other; 4,262; 42%
Bay of Plenty
source: BERL Regional Database, 2010
Bay of Plenty GDP, 2010$m
Property Services 1,519 14.9%
Business Services 700 6.9%
Agriculture 608 6.0%
Health Services 581 5.7%
Wood and Paper Product Manufacturing 506 5.0%
Forestry and Logging 466 4.6%
Communication Services 423 4.2%
Finance 373 3.7%
Food, Beverage and Tobacco 370 3.6%
Education 366 3.6%
Government Administration 314 3.1%
Personal and Household Good Retailing 291 2.9%
Construction Trade Services 257 2.5%
Food Retailing 222 2.2%
Basic Material Wholesaling 221 2.2%
Bay of Plenty GDP, 2010$m
Property Services 1,186 17.3%
Agriculture 455 6.6%
Wood and Paper Product Manufacturing 426 6.2%
Forestry and Logging 375 5.5%
Business Services 358 5.2%
Education 292 4.2%
Health Services 291 4.2%
Food, Beverage and Tobacco 273 4.0%
Government Administration 258 3.8%
Finance 183 2.7%
Electricity and Gas Supply 177 2.6%
Personal and Household Good Retailing 172 2.5%
Construction Trade Services 170 2.5%
Communication Services 164 2.4%
Basic Material Wholesaling 158 2.3%
Property Services
Business Services
Communication Services
Finance
Health Services
Agriculture
Food, Beverage
and Tobacco
Government Administrati
on
EducationPersonal and
Household Good
Wholesaling
other; 76,077; 41%
New Zealand
source: BERL Regional Database, 2010
New Zealand GDP, 2010$m
Property Services 25,635 13.6%
Business Services 17,663 9.4%
Communication Services 12,249 6.5%
Finance 9,944 5.3%
Health Services 9,230 4.9%
Agriculture 8,496 4.5%
Food, Beverage and Tobacco 8,402 4.5%
Government Administration 8,298 4.4%
Education 6,183 3.3%
Personal and Household Good Wholesaling 5,625 3.0%
Personal and Household Good Retailing 4,806 2.6%
Machinery and Motor Vehicle Wholesaling 4,583 2.4%
Construction Trade Services 4,064 2.2%
General Construction 3,703 2.0%
Food Retailing 3,635 1.9%
New Zealand GDP, 2010$m
Property Services 20,318 15.8%
Business Services 8,860 6.9%
Food, Beverage and Tobacco 6,875 5.4%
Agriculture 6,649 5.2%
Government Administration 5,603 4.4%
Health Services 5,185 4.0%
Education 5,052 3.9%
Finance 4,951 3.9%
Personal and Household Good Wholesaling 4,223 3.3%
Communication Services 4,028 3.1%
Machinery and Motor Vehicle Wholesaling 3,441 2.7%
Electricity and Gas Supply 3,148 2.5%
Personal and Household Good Retailing 3,060 2.4%
Machinery and Equipment Manufacturing 2,999 2.3%
Wood and Paper Product Manufacturing 2,719 2.1%
31 Bay of Plenty Economic Profile Bay of Connections
August 2011
Property Services
The major difference in the industry analysis when comparing by GDP rather than employment is the
appearance of Property Services as the number one contributor to GDP for all jurisdictions. Property
Services includes the economic contribution of home ownership, which does not employ people and is
not necessarily a productive industry in its own right (and which is why it does not appear in the largest
industries in the FTE analysis). Ownership of occupied dwellings accounts for around half of the
Property Services industry GDP at the national level or around eight percent of total GDP.
However, the Property Services industry also includes property operators and developers, real estate
agents and machinery and equipment hiring and leasing, which are productive occupations. Based on
national proportions, taking Ownership of Occupied Dwellings out of the Property Services would see
the contribution of the industry at around half its reported size which, in several jurisdictions, remains
significant.
Business Services
The Business Services industry is the second largest contributor to GDP, accounting for 9.4 percent at a
National Level, up from 6.9 percent in 1995. In the Bay of Plenty region, Business Services is the
second largest contributor to GDP accounting for 6.9 percent, up from 5.2 percent in 1995. As expected
with the main centre of Tauranga, Business Services is strongest in the Western Districts, accounting for
7.5 percent of GDP. This contrasts with the Eastern Districts, where Business Services account for 4.3
percent of GDP. This suggests that many of the required services for businesses within the Eastern
Districts are obtained in either the Western Districts or Rotorua. Indeed, Rotorua businesses appear to
be supported locally, with the Business Services industry accounting for 7.0 percent of GDP.
Agriculture
Nationally, Agriculture is the sixth largest industry, accounting for around 4.5 percent of total GDP. In
the Bay of Plenty region, Agriculture is relatively more important being the third largest contributor to
GDP at 6.0 percent of the Region’s GDP. Agriculture is particularly important to the Eastern Districts,
accounting for 10.5 percent of GDP; whereas in Rotorua, the Agriculture industry only accounts for 3.9
percent of GDP. Since 1995, the relative contribution of the Agriculture industry to GDP has been
declining across all jurisdictions apart from the Eastern Districts. However, as noted in the employment
growth area this is partly explained by a change in classification or activity, with the Services to
Agriculture, Hunting & Trapping industry now accounting for 2.8 percent of GDP in the Western Districts.
Forest Industry
Neither Forestry & Logging and Wood & Paper Product Manufacturing appear in the top 15 industries in
New Zealand in 2010 while, in 1995, Wood & Paper Product Manufacturing was the 15th largest
contributor accounting for 2.1 percent of national GDP. In the Bay of Plenty region, Wood & Paper
Product Manufacturing (5th
) and Forestry & Logging (6th) together account for close to 10 percent of the
Region’s GDP (5.0 percent and 4.6 percent respectively).
32 Bay of Plenty Economic Profile Bay of Connections
August 2011
In Rotorua, Forestry & Logging is the second largest contributor to GDP at 11.0 percent and Wood &
Paper Product Manufacturing is the 4th
largest contributor to GDP at 6.6 percent. The contributions are
even higher in the Eastern Districts where Wood & Paper Product Manufacturing accounts for 12.2
percent of GDP and Forestry and Logging accounts for 6.7 percent.
The rates of growth but also the absolute growth by FTE and GDP for each of the sub-Regions, the Bay
of Plenty region and New Zealand are shown in Table 5.3 through to Table 5.6. This provides a clearer
picture of the industries that have been growing fastest, but also the industries that have been making
the greatest contribution to growth in the various jurisdictions.
Table 5.3. Rate and absolute growth by FTEs, 1995 to 2010
Bay
of
Ple
nty
New
Ze
ala
nd
Focussing on the region, there are five industries that are on both the ten fastest growing and the ten
largest contributions to employment. The growth does appear to be population related with Community
Services, Sport & Recreation, and Health Services making up three of the five. However, the two
largest increases are in Business Services and Services to Agriculture, Hunting & Trapping which
together have added 8,800 jobs over the last fifteen years. The growth in Business Services is
consistent with nationally. However, the growth in Services to Agriculture, Hunting & Trapping
experienced in the Bay of Plenty is not a national phenomenon.
0 10 20 30 40
Defence
Services to Agriculture; Hunting and Trapping
Water Transport
Community Services
Sport and Recreation
Libraries, Museums and the Arts
Business Services
Services to Finance and Insurance
Health Services
Other Services
%pa change 1995 to 2010source: BERL Regional Database, 2010
0 2,000 4,000 6,000
Business Services
Services to Agriculture; Hunting and Trapping
Health Services
Education
Community Services
Construction Trade Services
Accommodation, Cafes and Restaurants
Food Retailing
Personal and Household Good Retailing
Sport and Recreation
Additional FTEs, 1995 to 2010Source: BERL Regional Database, 2010
0 10 20 30 40
Other Transport
Services to Mining
Community Services
Storage
Sport and Recreation
Business Services
Libraries, Museums and the Arts
Services to Agriculture; Hunting and Trapping
Other Services
Construction Trade Services
%pa change 1995 to 2010source: BERL Regional Database, 2010
0 50,000 100,000 150,000
Business Services
Health Services
Community Services
Education
Construction Trade Services
Accommodation, Cafes and Restaurants
Other Services
General Construction
Food Retailing
Sport and Recreation
Additional FTEs, 1995 to 2010Source: BERL Regional Database, 2010
Fastest Growing by FTE Absolute increase by FTE
33 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.4. Rate and absolute growth by FTEs, 1995 to 2010 (cont...)
Fastest Growing by FTE Absolute increase by FTE
Ro
toru
a
We
ste
rn D
istr
icts
Ea
ste
rn D
istr
icts
In Rotorua, seven of the ten fastest growing industries are also on the ten largest contributors to
employment. Petroleum, Coal, Chemical & associated Product Manufacturing was the second fastest
growing but also the tenth largest contributor to employment in Rotorua. Metal Product Manufacturing
was the eighth fastest growing industry, although it wasn’t one of the ten largest contributors. The
absolute size of the Accommodation, Cafes & Restaurants industry made it the fifth largest contributor to
0 5 10 15
Community Services
Petroleum, Coal, Chemical & Assoc Prod Mfg
Libraries, Museums and the Arts
Sport and Recreation
Business Services
Health Services
Services to Finance and Insurance
Metal Product Manufacturing
Personal Services
General Construction
%pa change 1995 to 2010source: BERL Regional Database, 2010
0 200 400 600 800 1,000
Business Services
Health Services
Community Services
Sport and Recreation
Accommodation, Cafes and Restaurants
Education
Construction Trade Services
General Construction
Libraries, Museums and the Arts
Petroleum, Coal, Chemical & Assoc Prod Mfg
Additional FTEs, 1995 to 2010Source: BERL Regional Database, 2010
0 10 20 30 40
Defence
Services to Agriculture; Hunting and Trapping
Community Services
Air and Space Transport
Business Services
Sport and Recreation
Libraries, Museums and the Arts
Health Services
Services to Finance and Insurance
Accommodation, Cafes and Restaurants
%pa change 1995 to 2010source: BERL Regional Database, 2010
0 1,000 2,000 3,000 4,000
Services to Agriculture; Hunting and Trapping
Business Services
Health Services
Education
Construction Trade Services
Community Services
Accommodation, Cafes and Restaurants
Personal and Household Good Retailing
Food Retailing
Road Transport
Additional FTEs, 1995 to 2010Source: BERL Regional Database, 2010
0 20 40 60
Water Transport
Community Services
Food, Beverage and Tobacco
Libraries, Museums and the Arts
Services to Agriculture; Hunting and Trapping
Sport and Recreation
Other Services
Services to Finance and Insurance
Metal Product Manufacturing
Business Services
%pa change 1995 to 2010source: BERL Regional Database, 2010
0 100 200 300 400 500 600 700
Services to Agriculture; Hunting and Trapping
Education
Health Services
Food, Beverage and Tobacco
Community Services
Business Services
Other Services
Food Retailing
Construction Trade Services
Accommodation, Cafes and Restaurants
Additional FTEs, 1995 to 2010Source: BERL Regional Database, 2010
34 Bay of Plenty Economic Profile Bay of Connections
August 2011
FTE growth even though it wasn’t one of the ten fastest growing industries (13th
fastest).
In the Western Districts, five industries appear in the top ten for both fastest growing and largest
contributors to employment. Sectors of interest include Services to Agriculture, Hunting & Trapping,
which had the second fastest growth rate and was the largest contributor to employment; and
Accommodation, Cafes & Restaurants, which was the tenth fastest growing and the seventh largest
contributor. Other industries of interest that appeared on the fastest growing list were Air & Space
Transport, and Services to Finance & Insurance.
In the Eastern Districts, there were again five industries in the top ten for both fastest growing and
largest contributors to employment. Food, Beverage and Tobacco was the third fastest growing and the
fourth largest contributor. Services to Agriculture, Hunting & Trapping was the largest contributor to
employment growth and the fifth fastest growing industry (although there wasn’t much in the growth
rates between 2nd
and 5th
). The interesting industry in the Eastern Districts was the more than 40
percent per annum growth in the Water Transport industry.
Table 5.5 and Table 5.6 show the fastest and largest growing industries by the same regional groupings
but by GDP rather than employment. The trends are relatively similar to the FTE analysis although
there are some interesting additional industries that appear.
Both Communication Services and Property Services appear when looking at GDP contribution.
Property Services GDP is related to Owner Occupied Dwellings (with no related employment) and is not
necessarily and industry per se, which means it can be discounted in relation to importance.
Communication Services, however, appears due to the high GDP contribution per FTE, which means
that smaller increases in GDP are unlikely to show through in employment.
Other industries that made a significant contribution to GDP over the last 15 years at a regional level
include Agriculture, Forestry & Logging, and Food, Beverage & Tobacco. Both Agriculture and Food,
Beverage & Tobacco also appear in the top ten GDP contributors at a national level. These industries
are therefore significant to the economic growth of the Region and nationally.
35 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.5. Rate and absolute growth by GDP, 1995 to 2010
Ba
y o
f P
len
ty
New
Ze
ala
nd
Looking at the sub-Regions (Table 5.6) the industries that stand out from a GDP contribution
perspective are:
Forestry & Logging and Petroleum, Coal, Chemical & Associated Product Manufacturing in
Rotorua
Services to Agriculture; Hunting & Trapping in the Western and Eastern Districts
The Food, Beverage & Tobacco industry in the Eastern Districts, and
Communication Services in the Western Districts.
In terms of GDP contribution, the Forestry & Logging industry in Rotorua has contributed more than
double the GDP growth of the next largest industry, Business Services.
In the Western Districts, the largest contributors to GDP are mainly population-growth related.
In the Eastern Districts, the primary sector is the largest contributor with Agriculture, Food, Beverage &
Tobacco and Services to Agriculture; Hunting & Trapping are all in the top ten.
0 10 20 30
Defence
Water Transport
Services to Agriculture; Hunting and Trapping
Communication Services
Services to Finance and Insurance
Personal Services
Finance
Other Mining
Air and Space Transport
Health Services
%pa change, 1995 to 2010source: BERL Regional Database, 2010
0 100 200 300 400
Business Services
Property Services
Health Services
Communication Services
Finance
Agriculture
Services to Agriculture; Hunting and Trapping
Personal and Household Good Retailing
Food, Beverage and Tobacco
Forestry and Logging
$m, 1995 to 2010Source: BERL Regional Database, 2010
0 5,000 10,000
Business Services
Communication Services
Property Services
Finance
Health Services
Government Administration
Agriculture
Personal and Household Good Retailing
Food, Beverage and Tobacco
Construction Trade Services
$m, 1995 to 2010Source: BERL Regional Database, 2010
Fastest Growing by GDP Absolute increase by GDP
36 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.6. Rate and absolute growth by GDP, 1995 to 2010, (cont...)
Fastest Growing by GDP Absolute increase by GDP R
oto
rua
We
ste
rn D
istr
icts
Ea
ste
rn D
istr
icts
0 2 4 6 8 10
Non-Metallic Mineral Product Manufacturing
Petroleum, Coal, Chemical & Assoc Prod Mfg
Personal Services
Libraries, Museums and the Arts
Community Services
Services to Finance and Insurance
Forestry and Logging
Sport and Recreation
Finance
Health Services
%pa change, 1995 to 2010source: BERL Regional Database, 2010
0 50 100 150
Forestry and Logging
Business Services
Health Services
Wood and Paper Product Manufacturing
Property Services
Finance
Petroleum, Coal, Chemical & Assoc Prod Mfg
Communication Services
Agriculture
Sport and Recreation
$m, 1995 to 2010Source: BERL Regional Database, 2010
0 10 20 30
Defence
Services to Agriculture; Hunting and
Trapping
Air and Space Transport
Communication Services
Other Mining
Services to Finance and Insurance
Business Services
Health Services
Finance
Personal Services
%pa change, 1995 to 2010source: BERL Regional Database, 2010
0 100 200 300
Property Services
Business Services
Communication Services
Health Services
Finance
Services to Agriculture; Hunting and Trapping
Personal and Household Good Retailing
Agriculture
Services to Transport
Construction Trade Services
$m, 1995 to 2010Source: BERL Regional Database, 2010
0 10 20 30
Water Transport
Food, Beverage and Tobacco
Air and Space Transport
Insurance
Libraries, Museums and the Arts
Petroleum, Coal, Chemical & Assoc Prod Mfg
Services to Agriculture; Hunting and Trapping
Other Services
Services to Finance and Insurance
Finance
%pa change, 1995 to 2010source: BERL Regional Database, 2010
0 20 40 60
Agriculture
Food, Beverage and Tobacco
Health Services
Finance
Government Administration
Business Services
Property Services
Services to Agriculture; Hunting and Trapping
Food Retailing
Motor Vehicle Retailing and Services
$m, 1995 to 2010Source: BERL Regional Database, 2010
37 Bay of Plenty Economic Profile Bay of Connections
August 2011
5.4 Location Quotients
The Location Quotient (LQ) is a measure that helps analysts examine the relative concentration of
industry employment in a particular area relative to another larger, or base, area. In this case, New
Zealand is the base area. The measures provide a potentially valuable insight into a local labour
market’s industry structure, relative to the larger base area.
When the LQ ratio is larger than 1.0 the percentage of the employed in the industry locally is higher than
the percentage of the employed in the larger area. Likewise, when the LQ ratio is smaller than 1.0 the
percentage of people employed in this industry locally is smaller than the larger area.
Generally, when the LQ is larger than 1.0 analysts need to be concerned with national or larger
economic pressures on this industry. When the LQ is less than 1.0 the industry is likely to be driven by
local factors. That is, when the LQ is less than 1.0, it can be assumed that the industry is not meeting
the basic needs of its area, whereas an LQ greater than 1.0 suggests that the industry is supplying
outside areas or is a net exporter.
Table 5.7. Bay of Plenty Location Quotients
Table 5.7 shows the industries in the Bay of Plenty region that have location quotients greater than 1.2,
of which there are eight. Also included in the table are the location quotients for that industry by sub-
region.
The primary sector focus is apparent in the LQs, with primary sector activity and transport accounting for
seven of the eight industries. Two sectors stand out, the:
agriculture sector – Agriculture, Services to Agriculture; and Hunting & Trapping; and
forestry sector – Forestry & Logging; Wood & Paper Product Manufacturing.
Transport in relation to these sectors, including the Port, is the likely reason for the high LQs for Other
Transport and Road Transport. Similarly, Basic Material Wholesaling is likely high in support of these
industries.
Looking more closely at the sub-Regions, both Rotorua and the Eastern Districts have high LQ’s within
the forestry sector industries, while Western and Eastern Districts have High LQ’s in the agriculture
sectors. Within transport, Other Transport is high in Eastern and Western Districts, while Road
IndustriesBay of
PlentyRotorua
Western
Districts
Eastern
Districts
Services to Agriculture; Hunting & Trapping 4.1 0.4 5.8 3.9
Forestry & Logging 3.5 8.9 0.7 5.2
Wood & Paper Product Manufacturing 2.8 3.8 1.2 6.8
Other Transport 2.5 0.8 2.2 6.3
Agriculture 1.3 0.8 1.2 2.2
Motor Vehicle Retailing & Services 1.2 1.2 1.2 1.3
Road Transport 1.2 1.4 1.3 0.6
Basic Material Wholesaling 1.2 1.1 1.3 0.8
source: BERL Regional Database, 2010
38 Bay of Plenty Economic Profile Bay of Connections
August 2011
Transport is high within Western Districts and Rotorua.
The final industry, Basic Material Wholesaling is largely in the main centres of Western Districts and
Rotorua.
Table 5.8. Top 10 LQs by sub-Region
Taking a closer look at the industry LQs by sub-Region, the tourism sector becomes apparent in
Rotorua. Sport & Recreation, Libraries, Museums & the Arts, Accommodation, cafes & Restaurants, all
appear in the top 10.
The Logistics sector becomes obvious in both Western and Eastern Districts with Other Transport,
Storage, Services to Transport, Road Transport, Water Transport, and Rail Transport all in the top 10.
The other sector that is identified through LQs is around energy, with Electricity & Gas Supply and Other
Mining in Western Districts; and Petroleum, Coal, Chemical & Associated Product Manufacturing in
Rotorua.
Finally, Commercial Fishing in Western Districts has a LQ of 1.7, while Education and Other Services
are important in the Eastern Districts.
The strength of the Bay of Plenty region in the Forestry and Agriculture sectors are even more apparent
at the individual Local Authority level.
Rotorua LQ Western Districts LQ Eastern Districts LQ
Forestry & Logging 8.9Services to Agriculture; Hunting
& Trapping5.8
Wood & Paper Product
Manufacturing6.8
Wood & Paper Product
Manufacturing3.8 Other Transport 2.2 Other Transport 6.3
Sport & Recreation 2.5 Commercial Fishing 1.8 Forestry & Logging 5.2
Libraries, Museums & the Arts 1.9 Storage 1.7Services to Agriculture; Hunting
& Trapping3.9
Accommodation, Cafes &
Restaurants1.8 Services to Transport 1.6 Water Transport 2.2
Road Transport 1.4 Other Mining 1.6 Agriculture 2.2
Motor Vehicle Retailing &
Services1.2 Electricity & Gas Supply 1.3 Education 1.4
Petroleum, Coal, Chemical &
Assoc Prod Mfg1.2 Basic Material Wholesaling 1.3 Other Services 1.4
Water Supply, Sewerage &
Drainage Services1.2 Road Transport 1.3
Motor Vehicle Retailing &
Services1.3
Property Services 1.2 Property Services 1.2 Rail Transport 1.3
source: BERL Regional Database, 2010
39 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.9. Top LQs by local authority
Tauranga LQ Western Bay of Plenty LQ Rotorua LQ Whakatane LQ Kawerau LQ Opotiki LQ
Other Transport 2.5
Services to
Agriculture; Hunting
& Trapping
16.7 Forestry & Logging 8.9 Other Transport 8.4
Wood & Paper
Product
Manufacturing
29.3
Services to
Agriculture;
Hunting & Trapping
12.2
Commercia l
Fishing2.2 Other Mining 5.8
Wood & Paper
Product
Manufacturing
3.8 Forestry & Logging 4.8 Rai l Transport 7.0 Forestry & Logging 7.1
Services to
Agriculture;
Hunting & Trapping
2.2 Agriculture 3.8 Sport & Recreation 2.5
Wood & Paper
Product
Manufacturing
3.7
Machinery &
Equipment
Manufacturing
5.7 Agriculture 4.3
Services to
Transport2.1
Wood & Paper
Product
Manufacturing
2.1
Libraries ,
Museums & the
Arts
1.9 Water Transport 3.2 Forestry & Logging 4.7Commercia l
Fishing3.3
Electrici ty & Gas
Supply1.8 Storage 2.1
Accommodation,
Cafes &
Restaurants
1.8
Services to
Agriculture;
Hunting & Trapping
2.7
Water Supply,
Sewerage &
Drainage Services
3.0 Other Transport 2.8
Storage 1.5 Forestry & Logging 1.9 Road Transport 1.4 Agriculture 2.1Metal Product
Manufacturing2.5 Education 1.5
Bas ic Materia l
Wholesa l ing1.5 Other Transport 1.5
Electrici ty & Gas
Supply1.9 Other Services 2.3
Road Transport 1.4Food, Beverage &
Tobacco1.4 Education 1.5
source: BERL Regional Database, 2010
40 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 5.9 gives us a clearer picture of the concentrations of activity within local authority areas. LQs are
particularly relevant in smaller areas, where there isn’t the breadth of activity associated with larger
populations and single industries can account for a large proportion of activity.
The overwhelming importance of the forestry sector to Kawerau is evident, with the top seven industries
in terms of LQ all associated to the sector. The LQ of 29.3 for Wood & Paper Product Manufacturing is
extremely high, with workers in Kawerau 29 times more likely to work in that sector than nationally. The
forestry sector is spread throughout the region. Forestry & Logging (7.1) is important in Ōpōtiki; both
Forestry & Logging (8.9) and Wood & Paper Product Manufacturing (3.8) in Rotorua; Forestry & Logging
(4.8) and Wood & Paper Manufacturing (3.7) in Whakatane, and Forestry & Logging (1.9) in Western
Bay of Plenty.
In Western Bay of Plenty, the role of Agriculture is strong, with Services to Agriculture, Hunting &
Trapping (16.7) and Agriculture (3.8). The focus on food crops is reflected in the LQ of 1.4 for Food,
Beverage & Tobacco. Interestingly, Other Mining has an LQ of 5.8.
Ōpōtiki also has very high LQs in Services, to Agriculture, Hunting & Trapping (12.2), Agriculture (4.3),
and Commercial Fishing (3.3). Education also has a high LQ, a reflection of a commitment to improving
social outcomes in the area.
Commercial Fishing (2.2) also appears in Tauranga, although Logistics is the sector with high
employment ratios in the area – Other Transport (2.5), Services to Transport (2.2), Storage (1.5), and
Road Transport (1.4).
In Whakatane LQ ratios are spread between transport (Other Transport - 8.4 and Water Transport - 3.2),
forestry (Forestry & Logging - 4.8 and Wood & Paper Product Manufacturing - 3.7) and agriculture
(Services to Agriculture, Hunting & Trapping – 2.7 and Agriculture – 2.1).
41 Bay of Plenty Economic Profile Bay of Connections
August 2011
6 Review of Strategic Sectors
The Bay of Connections Regional Economic Development Strategy was implemented in 2007. As such,
a number of sector strategies have already been initiated. To date there are a number of actions that
have been completed, and a number that are in progress as this update to the strategy is being
developed. The current status of sector strategies is shown below in Table 6.1.
Table 6.1. Bay of Connections 2007 sectors
Sector Status
Forestry To be launched – September 2011
Energy To be launched – September 2011
Food Processing Current
Aquaculture current
Tourism Current - with the RTOs
Transport and Logistics TBC
Niche manufacturing TBC
Marine Current – Led by Priority One
As part of this industry analysis we look more closely at the focus areas identified as part of the proposal
process and initial meeting. These sectors are aligned to perceived comparative advantages and/or
existing activity in the Bay of Plenty region and nationally.
The analysis in chapter 5 supports the selection of the majority of these industries, although a few are
based on factors other than relevance, growth and concentration. For example, aquaculture is based on
recent activity and comparative advantage, which has presented an opportunity to develop an industry
in the Region. Similarly the marine precinct, emerging technologies and ICT are based on either an
identified opportunity in the Bay of Connections region or a smart technology that can be expanded
internationally.
Combining the existing strategies with the industries that stood out in the previous chapter, 13 sectors
have been identified that warrant further analysis. The strategic sectors that are assessed in more detail
are:
Kiwifruit
Dairy
Meat
Other Food Cultivation &
Processing
Forestry
Energy
Transport & Logistics
Tourism
ICT
Tertiary Education
Emerging Technologies
Marine
Aquaculture
The sectors are made up of a number of industries and some industries are included in more than one
sector. Where industries are spread across in more than one sector (i.e. Services to Agriculture) the
activity has been split proportional to the size of the sectors. The proportion of industries related to
Tourism are calculated based on 2010 Tourism Satellite Account ratios.
There are still issues around where specific industries sit, particularly where there is sector overlap in
42 Bay of Plenty Economic Profile Bay of Connections
August 2011
terms of the activity. For example, Forestry overlaps with Energy, such as where wood biomass can be
used to generate energy. We have not been able to address this issue and have placed the industry
into the sector that it is identified. In the above case activity would be captured under Forestry.
For most sectors, the industry composition is obvious, for example, Meat, Dairy, Kiwifruit, and Forestry.
However, for other sectors the industry composition is less clear. For the ICT and Marine sectors we
have used the industry classifications identified in the Auckland Economic Futures report and made a
judgement on the proportion related to Marine in the Bay of Plenty region.
In other areas such as energy, the traditional industries of Electricity Supply; and Gas Supply, are no
longer the mainstay or the focus of the sector going forward. We expect that a portion of the sector will
likely sit in the manufacturing, technical services and even processing sectors. As our understanding of
the sectors improves, and particularly as sector strategies are developed, we will be better able to define
and measure these sectors. In the first instance, however, these groupings will suffice to provide a
“stake in the ground” or benchmark from which to develop measures of activity.
6.1 Approach
Each of the sectors are analysed in terms of their historical performance (employment and GDP) and
LQs.
This section will benefit from more detailed sector analysis that is occurring in the next stage of this
refresh. In particular, summary templates will be developed for each sector providing an overview of the
sector, its relevance to the region and country, and a review of the key issues or opportunities for the
sector. Then their relationship to existing national growth sectors along with each sector’s efforts to
encourage growth are explored.
Table 6.2 provides a breakdown of the industries that contribute to, or make up, each of the 14 sectors.
43 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 6.2. Key sector industry composition
Key Sector Industries
Aquaculture Aquaculture; Seafood Processing (50%).
Forestry Plant Nurseries (10%); Forestry; Logging; Services to Forestry; Log Sawmilling; Wood Chipping; Timber
Resawing & Dressing; Plywood & Veneer Manufacturing; Fabricated Wood Manufacturing; Wooden
Structural Component Manufacturing; Wood Product Manufacturing nec; Pulp, Paper & Paperboard
Manufacturing; Solid Paperboard Container Manufacturing; Corrugated Paperboard Container
Manufacturing; Paper Bag & Sack Manufacturing; Paper Product Manufacturing nec.
Kiwifruit Plant Nurseries (30%); Kiwi Fruit Growing; Aerial Agricultural Services (60%); Services to Agriculture nec
(50%); Fruit & Vegetable Processing (75%).
dairy Dairy Cattle Farming; Aerial Agricultural Services (10%); Services to Agriculture nec (50%); Milk & Cream
Processing; Ice Cream Manufacturing; Dairy Product Manufacturing nec.
Other Food
Cultivation &
Processing
Grain Growing; Poultry Farming (Meat); Poultry Farming (Eggs); Beekeeping; Tobacco & Hops Growing;
Cultivated Mushroom Growing; Crop & Plant Growing nec; Hunting & Trapping; Rock Lobster Fishing; Prawn
Fishing; Finfish Trawling; Squid Jigging; Line Fishing; Marine Fishing nec; Poultry Processing; Oil & Fat
Manufacturing; Flour Mill Product Manufacturing; Cereal Food & Baking Mix Manufacturing; Bread
Manufacturing; Cake & Pastry Manufacturing; Biscuit Manufacturing; Sugar Manufacturing; Confectionery
Manufacturing; Seafood Processing (50%); Prepared Animal & Bird Feed Manufacturing; Food
Manufacturing nec; Soft Drink, Cordial & Syrup Manufacturing; Beer & Malt Manufacturing; Wine
Manufacturing; Spirit Manufacturing; Tobacco Product Manufacturing; Plant Nurseries (50%); Cut Flower &
Flower Seed Growing; Vegetable Growing; Grape Growing; Apple & Pear Growing; Stone Fruit Growing;
Citrus Growing; Berry Fruit Growing; Other Fruit Growing nec; Fruit & Vegetable Processing (25%).
Energy Electricity Supply; Gas Supply.
Transport &
Logistics
Road Freight TransportLong Distance Bus Transport (75%); Short Distance Bus Transport (including
Tramway) (75%); Taxi and Other Road Passenger Transport (75%); Rail Transport (75%); International Sea
Transport (75%); Coastal Water Transport (75%); Inland Water Transport (75%); Scheduled International Air
Transport (16%); Scheduled Domestic Air Transport (16%); Non-Scheduled Air and Space Transport (16%);
Pipeline Transport (72%); Transport nec (72%); Parking Services (72%); Services to Road Transport nec (72%);
Stevedoring (72%); Water Transport Terminals (72%); Port Operators (72%); Services to Water Transport nec
(72%); Services to Air Transport (72%); Travel Agency Services (72%); Road Freight Forwarding (72%); Freight
Forwarding (except Road) (72%); Customs Agency Services (72%); Services to Transport nec (72%); Grain
Storage (72%); Storage nec (72%); Courier Services; Other Transport Equipment Leasing (83%).
ICT Professional & Scientific Equipment Manufacturing nec (50%); Computer & Business Machine
Manufacturing; Telecommunication, Broadcasting & Transceiving Equipment Manufacturing (20%);
Electronic Equipment Manufacturing nec (50%); Electric Cable & Wire Manufacturing (25%); Professional
Equipment Wholesaling (50%); Computer Wholesaling; Business Machine Wholesaling nec (50%); Electrical
& Electronic Equipment Wholesaling nec (50%); Telecommunication Services; Data Processing Services;
Information Storage & Retrieval Services; Computer Maintenance Services; Computer Consultancy
Services.
Tertiary
Education
Higher Education; Technical & Futher Education; Other Education
Marine Synthetic Fibre Textile Manufacturing (10%); Textile Finishing (10%); Made-Up Textile Product Manufacturing
(10%); Rope, Cordage & Twine Manufacturing (20%); Synthetic Resin Manufacturing (10%); Spring & Wire
Product Manufacturing (10%); Nut, Bolt, Screw & Rivet Manufacturing (10%); Metal Coating & Finishing
(10%); Fabricated Metal Product Manufacturing nec (10%); Shipbuilding; Boatbuilding; Professional &
Scientific Equipment Manufacturing nec (10%); Telecommunication, Broadcasting & Transceiving
Equipment Manufacturing (20%); Electrical Equipment Manufacturing nec (10%); Pump & Compressor
Manufacturing (10%); Business Machine Wholesaling nec (10%); Machinery & Equipment Wholesaling nec
(10%); Marine Equipment Retailing (90%); Consultant Engineering Services (10%).
Tourism Retail (10%); Cafes & restaurants (40%); Road passenger, rail & water transport (40%); Air transport (84%);
Other transport, storage & transport services (28%); Machinery & equipment hiring & leasing (17%);
Cultural & recreational services (13%).
Emerging
Technologies
Structural Steel Fabricating; Architectural Aluminium Product Manufacturing; Structural Metal Product
Manufacturing nec; Metal Container Manufacturing; Sheet Metal Product Manufacturing nec; Medical &
Surgical Equipment Manufacturing.
Meat Grain-Sheep & Grain-Beef Cattle Farming; Sheep-Beef Cattle Farming; Sheep Farming; Beef Cattle Farming;
Pig Farming; Deer Farming; Mixed Livestock; Livestock Farming nec; Meat Processing; Bacon, Ham &
Smallgood Manufacturing.
44 Bay of Plenty Economic Profile Bay of Connections
August 2011
6.2 Summary of employment and GDP in 2010
Together these 13 key sectors account for a third of regional employment and 35 percent of regional
GDP, in 2010. The contribution these sectors make to regional employment and GDP is shown in
Figure 6.1. The largest sectors in the region in terms of employment are Dairy, Kiwifruit, Tourism,
Forestry, and Transport & Logistics. In terms of GDP, the largest sectors are Forestry, Dairy, Kiwifruit,
Tourism and Transport & Logistics.
Figure 6.1. Key sector employment and GDP in BOP region, 2010
6.2.1 Growth
FTE employment over the last 15 years for key sectors and all sectors are shown in
Aquaculture, 219, 0% Forestry,
4,566, 4%
Kiwifruit, 5,396, 5%
Dairy, 6,001, 6%
Other Food Cultivation &
Processing, 3,290, 3%
Energy, 359, 0%
Transport & Logistics, 3,589,
4%
ICT, 1,150, 1%
Marine, 491, 1%Tourism, 5,363,
5%
Emerging Techs, 840, 1%
Meat, 1,549, 2%
Tertiary Education,
1,492, 1%
non-key sectors, 70,453, 67%
Aquaculture, 26, 0%
Forestry, 976, 10% Kiwifruit, 306, 3%
Dairy, 382, 4% Other Food Cultivation &
Processing, 320, 3%
Energy, 201, 2%
Transport & Logistics, 458, 4%
ICT, 265, 3%
Marine, 39, 0%
Tourism, 315, 3%
Emerging Techs, 72, 1%
Meat, 153, 1%
Tertiary Education, 72, 1%
non-key sectors, 6,590, 65%
source: BERL Regional Database, 2010
45 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 6.3. The fastest growth over the 15 year period has been in Other Food Cultivation & Processing
at 3.7 percent per annum followed by Dairy and Marine, both at 3.4 percent per annum.
The next fastest growing sectors are aquaculture (3.3 percent per annum) and Kiwifruit (3.2 percent per
annum). These compare to growth of 2.5 percent for all non-key sectors. However, across all key
sectors, the average employment growth has been 1.3 percent per annum.
46 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 6.3. FTE employment in key sectors
Over the last five years the fastest growth has been in ICT (9.7 percent per annum), Dairy (5.5 percent
per annum), Aquaculture (4.2 percent per annum), and Kiwifruit (4.1 percent per annum). Non-key
sectors have been growing at 0.7 percent per annum over the same period.
Four of the key sectors have had negative employment growth over the last 15 years. These sectors
are Energy, Forestry, Horticulture and Meat. Over the last five years, six of the key sectors have
experienced negative employment growth – Forestry, Emerging Technologies, Horticulture, Meat,
Marine, and Tertiary Education.
Employment in the key sectors has grown faster than the non-key sectors over the last five years.
However, over the last 15 years, employment growth in non-key sectors has been almost twice as fast.
Regional GDP growth over the last 15 years for key sectors and all sectors is shown in Table 6.4.
The most rapid growth over the 15 years has been in Other Food Cultivation & Processing ICT (3.7
percent per annum) followed by Dairy and Marine (both 3.4 percent per annum). Aquaculture and
Kiwifruit grew by 3.3 percent per annum and 3.2 percent per annum respectively. Regional GDP in
sectors outside the key sectors grew by 2.5 percent per annum. GDP in the Meat sector has been
falling by 0.3 percent per annum over the last 15 years.
1995 2008 2009 2010 1995-2010 2005-2010
Aquaculture 134 188 205 219 3.3% 4.2%
Forestry 6,404 4,979 4,661 4,566 -2.2% -4.7%
Kiwifruit 3,387 5,099 5,527 5,396 3.2% 4.1%
Dairy 3,622 5,466 5,967 6,001 3.4% 5.5%
Other Food Cultivation & Processing 2,657 3,440 3,252 3,290 1.4% 0.6%
Energy 537 320 306 359 -2.6% 2.7%
Transport & Logistics 3,040 3,468 3,464 3,589 1.1% 0.4%
ICT 779 1,080 1,087 1,150 2.6% 9.7%
Marine 298 583 549 491 3.4% -1.8%
Tourism 3,790 5,401 5,264 5,363 2.3% 1.2%
Emerging Technologies 566 988 907 840 2.7% -2.8%
Meat 1,935 1,658 1,524 1,549 -1.5% -2.1%
Tertiary Education 1,145 1,429 1,453 1,492 1.8% -0.9%
key sectors 28,293 34,100 34,165 34,304 1.3% 1.0%
non-key sectors 48,941 73,874 72,646 70,453 2.5% 0.7%
Total Industry 77,234 107,974 106,812 104,757 2.1% 0.8%
source: BERL Regional Database, 2010
%pa GrowthKey Industries (FTE employment)
FTEs
47 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 6.4. GDP in key sectors
Over the last five years, the fastest GDP growth has been in ICT (28.5 percent per annum) and Dairy
(3.5 percent per annum). Emerging Technologies, Tertiary Education, Meat, and Horticulture have all
seen GDP contributions fall over the last five years.
Over the last five years, non-key sectors have grown by 0.4 percent per annum, compared to 1.8
percent per annum for the key sectors. Over the last 15 years, key sectors have grown slightly slower
than the non-key sectors.
The Forestry and Energy sectors have seen an increase in GDP growth at the same time that
employment in those sectors has fallen. This suggests improvements in labour productivity.
1995 2008 2009 2010 1995-2010 2005-2010
Aquaculture 15 23 25 26 4.0% 3.0%
Forestry 804 994 946 976 1.3% 1.5%
Kiwifruit 196 307 314 306 3.0% 1.9%
Dairy 238 363 381 382 3.2% 3.5%
Other Food Cultivation & Processing 195 343 314 320 3.4% -0.2%
Energy 177 177 167 201 0.9% 1.0%
Transport & Logistics 321 447 440 458 2.4% 1.5%
ICT 101 218 231 265 6.6% 28.5%
Marine 21 50 46 39 4.4% -2.9%
Tourism 203 323 312 315 2.9% 0.5%
Emerging Technologies 47 102 84 72 3.0% -6.5%
Meat 157 173 154 153 -0.2% -3.5%
Tertiary Education 65 73 71 72 0.7% -4.6%
Key Sectors 2,539 3,592 3,483 3,585 2.3% 1.8%
non-key sectors 4,321 6,956 6,814 6,590 2.9% 0.4%
Total Industry 6,861 10,549 10,297 10,175 2.7% 0.9%
source: BERL Regional Database, 2010
GDP, 2010$mBay of Plenty
%pa Growth
48 Bay of Plenty Economic Profile Bay of Connections
August 2011
6.3 Location Quotients
FTE and GDP LQs of the 13 key sectors are shown in Table 6.5. Of the 13, the six of the seven sectors
have both FTE and GDP LQs greater than one. Of these, Kiwifruit, Forestry and Dairy stand out with
FTE and GDP LQs both greater than 1.5.
At the other end of the scale, ICT, Meat, and Tertiary Education have low FTE and GDP LQs.
Table 6.5. Key sector LQs – 1995 and 2010
Interesting observations from the LQ analysis are:
Aquaculture, Other Food Cultivation & Processing and Marine LQs have increased rapidly for
both FTEs and GDP. In fact, Aquaculture now has LQs for FTEs and GDP above 1.0.
Forestry and Dairy FTE and GDP LQs have fallen between 1995 and 2010.
A number of the smaller sectors don’t necessarily have high LQs. However, there has been rapid
growth in either FTE or GDP LQs. Sectors that fall into this category include:
Aquaculture (which now has LQs greater than 1.0
Other Food Cultivation & Processing
Marine
1995 2010 1995 2010
Aquaculture 0.7 1.2 0.7 1.4
Forestry 3.2 2.9 3.4 3.2
Kiwifruit 4.7 5.2 3.9 5.0
Dairy 1.7 1.9 1.7 1.6
Other Food Cultivation & Processing 0.7 0.9 0.7 1.0
Energy 1.0 1.0 1.0 1.1
Transport & Logistics 1.1 1.1 1.0 1.0
ICT 0.5 0.4 0.5 0.6
Marine 0.7 0.9 0.7 0.9
Tourism 1.0 1.0 0.9 0.9
Emerging Technologies 1.0 0.9 1.0 1.0
Meat 0.6 0.5 0.6 0.5
Tertiary Education 0.6 0.5 0.7 0.6
Other 0.9 0.9 0.9 0.9
source: BERL Regional Database, 2010
FTEs GDPKey Sector LQs
49 Bay of Plenty Economic Profile Bay of Connections
August 2011
6.3.1 Regional LQs
Activity in key sectors is geographic. Looking at each sub-Region it is apparent where each key sector
is active. The geographic breakdown of LQs for employment by sub-Region is shown in Table 6.2.
Table 6.6. Key Sector Employment LQs by sub-Region, 2010
At a sub-Regional level it is clear that Aquaculture is predominantly active in the Western Districts and
close to non-existent in Rotorua and Eastern Districts. Forestry is strong across all sub-Regions, but
mainly in Eastern Districts and Rotorua. Similarly, Kiwifruit is based in the Western and Eastern
districts, with little activity in Rotorua. Dairy is strong across all sub-Regions, but is strongest in the
Eastern Districts. Other Food Cultivation & Processing is focused mainly in the Western Districts.
Transport & Logistics is concentrated in the Western Districts. Tourism is very active in Rotorua, but not
in the Western and Eastern districts.
6.4 Relationships between regional and national sectors and sector strategies
As noted early in the report, regional sector strategies will be most successful where they:
are based on a regional capability or comparative advantage
are aligned with nationally competitive sectors
have strong sector buy-in and leadership
have areas/issues where intervention can support transformative growth.
The relationships between the regional key sectors, nationally identified growth sectors and industry
based sector strategies are shown in Table 6.7.
Employment LQs (2010)Western
Districts
Eastern
DistrictsRotorua
Aquaculture 2.0 0.1 0.1
Forestry 1.1 6.2 5.0
Kiwifruit 7.2 6.2 0.3
Dairy 1.7 3.6 1.2
Other Food Cultivation & Processing 1.1 0.7 0.5
Energy 1.3 1.3 0.1
Transport & Logistics 1.3 0.5 1.0
ICT 0.5 0.1 0.2
Marine 1.0 0.9 0.6
Tourism 0.9 0.8 1.4
Emerging Technologies 1.1 0.3 0.8
Meat 0.4 0.5 0.6
Tertiary Education 0.4 0.8 0.8
Other 0.9 0.8 1.0
source: BERL Regional Database, 2010
50 Bay of Plenty Economic Profile Bay of Connections
August 2011
Table 6.7. Relationships between key regional and national growth sectors and sector strategies
BOP Sector National Growth Sector Sector Strategies
Aquaculture Food & Beverage (EGA); Agritech - Seafood The New Zealand Aquaculture Strategy (2006)
Forestry Silviculture; Wood Processing; Building &
Interiors
Wood Processing Strategy (2000-2003); Forest
Industry Development Agenda (FIDA)
Kiwifuit Food & Beverage (EGA); Agritech – Fruit &
Vegetables
Zespri; Turners and Growers?
Dairy Food & Beverage (EGA); Agritech - Dairy Strategy for New Zealand Dairy Farming
(2009)
Other Food
Cultivation &
Processing
Food & Beverage (EGA); Agritech – Wine,
Specialty Foods
Food & Beverage (EGA); Agritech – Fruit &
Vegetables
Growing a New Future (2009); Leveraging
Growth in the Emerging Functional Foods
Industry: Trends and Market Opportunities
(2009)
Growing a New Future (2009)
Energy Petroleum and Minerals (EGA); Clean
Technology – Clean Fuels
New Zealand Bioenergy Strategy (2010); A
Clean Economy Vision for New Zealand in
2025 (2009).
Transport &
Logistics
Infrastructure National Infrastructure Plan (2010)
ICT ICT (EGA); ICT – Productivity Improvement
Tools; Data Management Tools.
Digital Strategy 2.0 (2008)
Marine Marine Marine Sector Feasibility Study (2009); NZ
Marine Strategic Plan (2010)
Tourism Tourism & Major Events (EGA) New Zealand Tourism Strategy 2015 (2007)
Emerging
Technologies
Clean Technology; Novel Materials; Health &
Medical Technologies; High Value
Manufacturing; Engineering; Defence
Meat Food & Beverage (EGA); Agritech - Meat Red Meat Sector Strategy (2011)
Tertiary
Education
Export Education in New Zealand (2001);
The key sectors identified at a regional level are consistent with the important sectors from a national
perspective. Further, a large number of these sectors also have industry buy-in in terms of having
active sector growth strategies.
The two sectors where there are not clear cases for inclusion are Meat and Tertiary Education. Tertiary
Education, however, has benefits outside pure employment and GDP contribution as, properly
harnessed, it can support and underpin economic and social outcomes within the region. It is an
enabler industry. Therefore, strategies to ensure a strong, aligned, inclusive and pro-active tertiary
sector will provide benefits to a number of industries.
The meat sector has the potential to become a key sector, particularly with global demand and a clear
industry strategy to add value to exports. However, whether this is an area where the Bay of Plenty has
a comparative advantage and requires strategic support is questionable.
Ultimately, any of the identified sectors would warrant support under a Bay of Connections strategy.
However, with limited resources it is unlikely that all can be [supported]. What is likely is that the final
set of sectors supported will come from within this group.
51 Bay of Plenty Economic Profile Bay of Connections
August 2011
7 Business as Usual Projections
Business As Usual (BAU) projections provide a scenario of employment in the Bay of Plenty region out
to 2026. The scenario is based on the New Zealand economy growing at 2.6 percent per annum out to
2026, and industries in the Bay of Plenty regional economy growing at the same relative rate to national
industry over the last 15 years. That is, the scenario uses the 15 year historical performance of the
region’s industries to determine 15 year forward projections based on projected national growth.
The CGE projection used in this analysis is consistent with the one utilised in an earlier report to the Bay
of Plenty Regional Council on the State of Readiness of Bay of Plenty Local Government Infrastructure,
which was released in June 2011. However, the method of calculating regional industry growth is
slightly different to incorporate strategic sectors.
Table 7.1. New Zealand employment projections to 2026
Being a CGE projection, the analysis does not consider activity that is underway already. For example,
the projection suggests zero growth in aquaculture when, based on the New Zealand Aquaculture
Strategy, the sector aims to reach $1 billion in exports by 2026. An initial step will be to review and
confirm the likely growth outcomes for each of the key sectors agreed.
The projections suggest that FTE employment in New Zealand will increase by 307,000, from 1.84
million FTEs in 2010 to 2.14 million FTEs in 2026. There appears to be little difference in the growth
rate between key sectors and other (non-key) sectors. Fastest growth is projected to be in the
Emerging Technologies, Marine, Tourism, Forestry, ICT and Dairy sectors. The majority of growth is
expected to be in Tourism, Dairy, ICT, Meat and Forestry.
Based on the relative employment growth rates of the respective sectors, the BAU Projections for the
FTEs 2010 2026 difference %PA FTEsPA
Aquaculture 3,214 3,214 0 0.00% 0
Forestry 27,294 32,780 5,486 1.15% 343
Kiwifruit 18,030 20,074 2,044 0.67% 128
Dairy 56,623 66,884 10,261 1.05% 641
Other Food Cultivation & Processing 64,057 68,884 4,827 0.46% 302
Energy 6,244 6,863 619 0.59% 39
Transport & Logistics 57,582 68,339 10,758 1.08% 672
ICT 51,940 61,442 9,502 1.06% 594
Marine 9,483 11,526 2,043 1.23% 128
Tourism 95,324 114,836 19,511 1.17% 1,219
Emerging Technologies 15,767 19,281 3,515 1.27% 220
Meat 56,462 64,694 8,232 0.85% 515
Tertiary Education 48,000 55,628 7,627 0.93% 477
Total Strategic Sectors 510,018 594,445 84,426 0.96% 5,277
Other (non-key) Sectors 1,325,688 1,548,657 222,969 0.98% 13,936
Total All Industries 1,835,706 2,143,102 307,395 0.97% 19,212
source: BERL Regional Database and CGE Forecast to 2026
52 Bay of Plenty Economic Profile Bay of Connections
August 2011
Bay of Plenty Region are shown in Table 7.2.
Table 7.2. BAU employment projections for Bay of Plenty to 2026
Employment in the Bay of Plenty region is projected to grow at 1.54 percent per annum, which is slightly
faster than the 0.97 percent per annum growth nationally. Employment is projected to increase by 1,820
FTEs annually, reaching 134,000 by 2026.
Employment in the Strategic Sectors is expected to grow at an even faster 1.89 percent per annum,
which is 1.2 times faster than employment growth across all industries and 1.4 times faster than the
Other (non-key) Sectors in the Region.
The fastest growth is expected to occur in the Emerging Technologies sector, followed by Aquaculture
and Marine. Other Food Cultivation & Processing and Transport & Logistics are both expected to grow
at more than two percent per annum.
Energy, ICT, Meat and Tertiary Education are all forecast to grow slower than Other (non-key)
Industries.
The greatest growth is forecast to come out of the Kiwifruit sector, adding 116 FTEs per annum,
followed by Dairy with 112 FTEs per annum. Emerging Technologies is projected to add a further 110
FTEs annually, while Other Food Cultivation & Processing adds 103 FTEs annually. The next largest
are Transport & Logistics (96 FTEs pa), Tourism (80 FTEs pa), and Forestry (72 FTEs pa).
Employment growth in the key industries is shown in Figure 7.1.
FTEs 2010 2026 difference %PA FTEsPA
Aquaculture 219 441 223 4.49% 14
Forestry 4,566 5,719 1,153 1.42% 72
Kiwifruit 5,396 7,247 1,851 1.86% 116
Dairy 6,001 7,792 1,791 1.65% 112
Other Food Cultivation & Processing 3,290 4,941 1,652 2.58% 103
Energy 359 405 46 0.76% 3
Transport & Logistics 3,589 5,123 1,534 2.25% 96
ICT 1,150 1,245 95 0.50% 6
Marine 491 752 261 2.70% 16
Tourism 5,363 6,638 1,275 1.34% 80
Emerging Technologies 840 2,595 1,756 7.31% 110
Meat 1,549 1,698 149 0.58% 9
Tertiary Education 1,492 1,681 189 0.75% 12
Total Strategic Sectors 34,304 46,279 11,975 1.89% 748
Other (non-key) Sectors 70,453 87,574 17,121 1.37% 1070
Total All Industries 104,757 133,853 29,096 1.54% 1,818
source: BERL Regional Database and CGE Forecast to 2026
53 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 7.1. Bay of Plenty BAU employment projections to 2026
Figure 7.1 provides a relatively good picture of the sector structure of the region. A large proportion of
employment is in the primary and processing sectors, namely Dairy, Kiwifruit, Forestry, and Other Food
Cultivation & Processing. There is a strong Transport & Logistics that supports the primary and
processing sectors and then a large Tourism Sector based, which is largely based around Rotorua.
Energy, Marine, and Aquaculture are relatively small sectors in terms of employment.
However, the rate of change across the industries and the impact on employment are clearer in Figure
7.2 below.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
FTEs
2010 2026
source: BERL Regional Database and CGE Forecast to 2026
54 Bay of Plenty Economic Profile Bay of Connections
August 2011
Figure 7.2. Rate and level of employment growth
Based on the current projection, there are four key groups of sectors. Emerging Technologies sits alone
in the upper right quadrant and is forecast to have high growth rates and high absolute employment
impacts.
The second group is made up of Other Food Cultivation & Processing, Transport & Logistics, Kiwifruit
and Dairy. This group has high employment impacts and relatively high growth rates.
The third group, Aquaculture and Marine, have high growth rates but relatively low employment impacts.
The fourth group, Forestry and Tourism have relatively high employment impacts but low employment
growth rates. The remaining four sectors – Energy, Meat, Tertiary Education and ICT will all require
significant support if they are to achieve greater levels of growth or make major contributions to regional
employment.
The key thing to note in this analysis is that these forecast growth rates are what could be expected and
would likely occur even if the Bay of Connections did “nothing”.
However, the purpose of Bay of Connections is to encourage growth in the Bay of Plenty region and any
intervention should result in an increase in activity “above” what could be expected. Therefore
assuming that these are the expected employment outcomes, the objective of the strategy would be to
move these sectors up and to the right.
It is this “aspirational” growth that underpins the strategy and forms the next stages of this project. The
level to which the Bay of Connections strategy can achieve this for each sector is what will determine
the sectors supported.
Aquaculture
Forestry
KiwifruitDairy
Other Food Cultivation & Processing
Energy
Transport & Logistics
ICT
Marine
Tourism
Emerging Technologies
Meat
Tertiary Education
0%
1%
2%
3%
4%
5%
6%
7%
8%
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
% P
A I
ncr
eas
e
Additional FTEs to 2026source: BERL Regional Database and CGE Forecast to 2026
average growth rate of non-key industries
55 Bay of Plenty Economic Profile Bay of Connections
August 2011
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