Taranaki economy hits a dry spell

Venture Taranaki chief executive Stuart Trundle
Venture Taranaki chief executive Stuart Trundle

The financial impact of this summer's drought is beginning to show up in economic performance statistics for Taranaki.

While data released yesterday doesn't paint a disastrous picture for the region, it does show economic life has been definitely tougher so far this year.

Retail sales grew just 1 per cent in the first quarter of 2013 - much less than the up to double-digit growth experienced in many other regions, according to the latest report by ASB Bank.

As a result, the quarterly Regional Economic Scoreboard for the March quarter has downgraded Taranaki.

On one hand it reports good news on the employment front, with the region adding more than 6000 jobs in the year to March.

More people are looking for work, which it says is a sign of confidence in the strength of the Taranaki economy.

"But against the trend of upbeat sentiment, retail sales growth has been slow," the report says.

"After very strong non-residential construction activity over the 2011-12 summer, non-residential consent issuance this year has been very soft."

This caused Taranaki to slip down into the lower half of the rankings of the economic performance of all regions with a score of just two out of a possible five stars - with the report noting the region "needs an energy injection".

Venture Taranaki chief executive Stuart Trundle said not too much should be read into the latest statistics.

"However they are a useful reminder that in Taranaki, which is an export-oriented region reliant on global commodity prices and exchange rates, an unexpected set of circumstances can have a major impact," he said.

"In January our economy was going gangbusters and it looked like we were going to have a great year - but what we didn't know then was that it wasn't to rain for two months.

"Faced with that challenge Taranaki people, particularly farmers, obviously weren't going to go out and buy new kitchens or whiteware. It all goes to show how suddenly things can change quite dramatically."

But in the longer term Taranaki's economy remains very healthy, Mr Trundle said.

"There's a lot of public sector investment going on now via the construction of the new hospital, police station and Len Lye Centre in New Plymouth, and Methanex is soon to begin the restart project at the methanol plant in Waitara Valley which is going to require up to 700 workers on site.

"We're also heading towards a summer which is going see the busiest oil and gas exploration activity we've ever seen.

"The longer-term outlook is good ... there may be more speed bumps along the way but our economic performance will still be the envy of many other regions."

Taranaki Daily News