Taranaki on top of the heap

Oil and gas-rich Taranaki grew at more than twice the pace of the New Zealand average in the past decade and sailed through the economic downturn after the global financial crisis (GFC), a report on regional economies shows.

But some areas like Hawke's Bay have been in the doldrums.

The New Zealand Institute of Economic Research (NZIER) report on regional performance shows there are common national trends, but some clearly distinctive economies with their own drivers of success. That included the urban centres of Auckland and Wellington, and resource-driven economies like Taranaki boosted by mining and agriculture.

In contrast, some regions tended to rank "worryingly low" on many measures, such as Northland, Gisborne, Hawke's Bay, Manawatu and Wanganui.

NZIER said "once-prosperous provinces are falling into the economic doldrums as politics and policies focus on the urban powerhouses of Auckland and Wellington".

"Regional considerations need greater prominence in the political and economic debate," NZIER principal economist Shamubeel Eaqub said.

"As the country heads towards a general election, Auckland's and Wellington's views and needs are well-heard. ‘But what about Taranaki, which has the highest GDP [gross domestic product] per capita in the country?

"What about Northland and Gisborne-Hawke's Bay, which rank near the bottom on many economic measures?"

NZIER's report, "Regional Economies - shape, performance and drivers" shows Taranaki is a standout performer in the past decade, with an average 4.4 per cent growth in GDP per capita between 2000 and 2010. The average for New Zealand was just 1.7 per cent for the same period.

Taranaki ranked top of the regional table for GDP growth per capita.

Between 2007 and 2010, after the global financial crisis hit, Taranaki, Southland and the West Coast all managed reasonably strong growth. Output in Taranaki grew at a stonking 13 per cent a year over that period.

But even having natural resources is no guarantee of strong performance.

While Taranaki grew at four times the national rate after the GFC and the West Coast double the rate, Waikato underperformed the national average. At the same time, Hawke's Bay hardly grew at all, up an average of just 0.7 per cent.

While Taranaki's oil and gas sector means the region has a high GDP per person, at more than $70,000 and much higher than the national average, that does not flow through to household incomes, which are about the same as the national average.

"The high GDP per capita in Taranaki has not lifted the economic performance of everyone in Taranaki", the report says.

Auckland and Wellington on the other hand have high GDP per capita and high average household incomes, which are 20 per cent better than the national average. However, living costs in the big cities tend to be higher, especially for housing and transport. 

Taranaki Daily News