Regional export growth underpins pathway to national prosperity
Deloitte report assesses the economic impact of increasing exports in four industries from five regions
Wellington, 2 May 2019 – A new report from Deloitte released today shows how export growth in key industries provides significant economic benefits for our diverse regions, and in turn for the country.
The second edition of Deloitte’s Shaping our slice of heaven series, entitled ‘Regions of opportunity’, assesses the economic impact of increasing exports in tourism, agribusiness, food processing and advanced manufacturing from Auckland, Waikato, Hawke’s Bay/Gisborne, Wellington and Canterbury, over the period 2019 to 2040.
The analysis reveals (by industry):
- Tourism – the New Zealand economy would be $11.5 billion larger and there would be 23,100 more jobs if the five regions meet national export growth targets set for tourism.
- Agribusiness – the economy would be $4 billion larger and there would be 6,500 more jobs if the five regions meet national export growth targets set for agribusiness.
- Food processing – the economy would be $10.6 billion larger and there would be 23,200 more jobs if the five regions meet national export growth targets set for food processing.
- Advanced manufacturing – the economy would be $6.1 billion larger and there would be 39,500 more jobs if the five regions achieved the national target for research and development (R&D).
The first edition of the series focused on the economic opportunities presented by export industries that are predicted to experience above average global economic growth and are industries in which New Zealand has comparative advantages. It identified five industries of global opportunity for New Zealand: tourism, agribusiness, advanced manufacturing, food processing and international education.
Deloitte Access Economics partner Linda Meade says the second edition moves away from the national view and takes a deep dive into New Zealand’s regions.
“We examine how increasing exports in four of the five industries identified in our first report (we haven’t included international education) can contribute to the economic growth of some of our country’s diverse regions; in this case Auckland, Waikato, Hawke’s Bay/Gisborne, Wellington and Canterbury,” says Ms Meade.
“These five regions are a mix of urban, provincial and mixed urban/provincial, and are home to over two-thirds of our population and account for three-quarters of the nations’ gross domestic product (GDP).”
The economic impact (in GDP terms) for each region (by industry) is:
- Tourism - $3.9 billion
- Agribusiness – $2.5 billion
- Food processing - $6.1 billion
- Advanced manufacturing – $2.9 billion
- Tourism - $1.4 billion
- Agribusiness – $500 million
- Food processing - $800 million
- Advanced manufacturing – $100 million
- Tourism - $900 million
- Agribusiness – $600 million
- Food processing - $500 million
- Advanced manufacturing – $200 million
- Tourism - $2.5 billion
- Agribusiness – $600 million
- Food processing - $1.8 billion
- Advanced manufacturing – $1.5 billion
- Tourism - $600 million
- Agribusiness – $500 million
- Food processing - $1.5 billion
- Advanced manufacturing – $900 million
While all of New Zealand’s regions stand to benefit from export growth in key industries, such as tourism for example, neither the opportunities nor the benefits will be evenly distributed. Some regions may be better placed investing in other industries that draw on their strengths, including existing business clusters, natural advantages or logistics connectivity.
“In our view it is not enough to develop regional economic development plans region by region, without considering how the regions link together, and where each region’s competitive advantage lies,” says Ms Meade.
“New Zealand already has a well-developed national narrative about what makes its goods and services unique on the world stage. We propose there is further value to be unlocked by telling the ‘within New Zealand story’ that lies beneath,” she concludes.
You can read the full report at: www2.deloitte.com/nz/en/pages/economics/articles/shaping-our-slice-of-heaven-regions-of-opportunity.html
About the ’Shaping our slice of heaven’ series
The series is designed to promote debate across business, industry associations, government and the media. Its aim is to shine a spotlight on the challenges we face as a country to improve our overall prosperity and wellbeing, and in doing so ask some hard questions about what we are doing to rise to these challenges. Using Deloitte Access Economics’ computable general equilibrium (CGE) model, the ‘Regions of opportunity’ analysis measured the economic impact of scenarios under which each of the four industries’ exports grow at a rate necessary to reach industry or government targets over the period from 2019 to 2040.
About Deloitte Access Economics
Deloitte Access Economics is full service economic advisory practice led by 19 partners in Australia and New Zealand. The team provides economic advice and insight to help clients address broader questions relating to cost, pricing, revenue or markets. Deloitte Access Economics offers a full suite of economic advisory services including economic modelling, analysis and advisory services to clients plan for the future, understand the implications of major decisions, and navigate the complexities of economic policy.
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Deloitte New Zealand brings together more than 1300 specialist professionals providing audit, tax, technology and systems, strategy and performance improvement, risk management, corporate finance, business recovery, forensic and accounting services. Our people are based in Auckland, Hamilton, Rotorua, Wellington, Christchurch, Dunedin and Queenstown; serving clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with ambition to grow. Deloitte New Zealand is a member of Deloitte Asia Pacific Limited and of the Deloitte Network. For more information about Deloitte in New Zealand, go to our website www.deloitte.co.nz.
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