According to a Deloitte report published in May, New Zealand has plenty of goods and services exports to offer world markets, but the country’s full export potential hasn’t yet been realised.
While an earlier report defined the five industries of opportunity for New Zealand as being tourism, agribusiness, advanced manufacturing, food processing and international education. The recently released Shaping our slice of heaven: regions of opportunity, examines how five key regions; Auckland, Waikato, Hawke’s Bay/Gisborne, Wellington and Canterbury could add billions of dollars to the economy by 2040.
The regions were chosen to include a mix of five urban, provincial and mixed urban/ provincial regions to demonstrate the differences. These five regions are home to over two-thirds of the total population and account for three-quarters of the nation’s gross domestic product (GDP).
The report suggests that tourism, for example, could add $11.5 billion to the GDP by 2040 and add 23,100 jobs if the industry met the national growth targets set by the Government in 2018. Similarly, the other industries identified could grow the economy as follows; agribusiness $4 billion and 6,500 jobs, food processing $10.6 billion and 23.200 jobs and manufacturing $6.1 billion and 39,500 jobs.
Where the challenge will be in meeting these targets, according to Deloitte, is in the failure to foster links between the different regions.
“In our view it is not enough to develop regional economic development plans region by region, without deliberate consideration of how the regions link together, and where each region’s competitive advantage lies,” Linda Meade, Deloitte.
What does this mean for NZ businesses?
We are seeing significant investment to underpin and support linkages between the regions in major infrastructure projects such as the Waikato freight hub, a 33ha site in Auckland and the Ruakura Inland Port planned to stretch the length of Hamilton.
The Ports of Auckland owned Waikato freight hub at Horoitu is underway, opening to first client Open Country Dairy in April 2019. Positioned at the heart of the golden triangle of Auckland, Waikato and Bay of Plenty, and with close proximity to transport and lower costs, Waikato is expected to see strong interest from other businesses.
On the North Eastern side of Hamilton, Tainui Group Holdings (TGH) are constructing Ruakura Inland Port a massive (485ha) “project of national significance” expected to be complete by 2041, will also include a state of the art industrial park as well as residential areas and shopping precincts.
The benefits to businesses in terms of lower costs, better location, transport and infrastructure are likely to see businesses move to Waikato and Ruakura in the coming years.
In addition to large projects like these, all of New Zealand’s regions stand to benefit from growth in the industries outlined in the report. Some regions may be better placed to draw on their strengths in a specific area e.g. where there are existing business clusters, natural or logistical advantages. Focussing on a regions competitive advantages while retaining links with other regions and building a cohesive platform for growth is the challenge ahead.
NZ businesses across all regions have the opportunity to look at growth strategies. For those businesses looking to expand, finance will play a key role. Apricity Invoice Finance has helped a large number of NZ businesses fund for growth. Our solution allows businesses to get funds from their invoices back into the business faster, meaning they maintain cash flow financing stability and can focus on their next step.