Rural contracting almost a billion dollar industry

Last updated 11:10 22/01/2014

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The rural contracting industry contributed almost $1 billion to the country's economy last year.

Rural contractors added $947 million to New Zealand's gross domestic product, a report prepared by research company Infometrics for Rural Contractors New Zealand (RCNZ) says.

RCNZ chief executive Roger Parton said the research showed the industry was a major contributor to the agricultural sector and a vital part of the overall economy.

He said rural contracting had rapid growth in economic output between 2000 and 2008, expanding by 4.1 per cent a year compared with the national economy growth of 2.7 per cent.

"The sector's economic output peaked in 2008 and eased back in recent years due to cautious spending in the agricultural sector in the aftermath of the [global financial crisis]," he said.

"However, Infometrics expects demand for rural contracting to expand back towards its previous peak again as farmer confidence, buoyed by a sustained period of elevated commodity prices, returns in the coming years."

The contribution to the national economy came from 5255 registered rural contracting businesses, often overlooked by glamour businesses in the city. These businesses employ nearly 18,000 people.

Parton said the high employment demonstrated the growing importance and influence of rural contracting in agriculture and the need for politicians and policymakers to better understand the industry.

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- Fairfax Media

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