Immediately to the north of Taupo at Wairakei the tourist gets his first glimpse of the basic features of the region's economy – power, agriculture, and forestry. It will be the geysers and the Huka Falls of the Waikato River that have attracted him as a tourist to the area. But the geothermal power of the district has now been tapped for the production of electricity. Wairakei geothermal station has at present an installed capacity of 162,420 kW, the effective capacity being 151,245 kW. Wairakei represents only a small fraction of the total installed capacity in the Waikato, the greater proportion of which is drawn from the hydro-electric dams. The original dams were constructed lower down the river at Arapuni and Karapiro. During the 1950s the Maraetai, Whakamaru, and Atiamuri stations were brought into production, followed by Ohakuri and Waipapa in 1961, so that at March 1962 the total installed capacity along the river was 774,800 kW. With the completion of Aratiatia (90,000 kW) in 1964 the resources of the Waikato, with the exception of Maraetai Number 2 (180,000 kW) station, where work has been discontinued, will have been almost exhausted. Consequently there has been a search for additional sources of power within the region, and a number of schemes have been put forward, including the diversion of the Wanganui River headwaters towards Lake Taupo, the development of sites along the Tongariro River and on the Kaituna River, using the outflow of Lake Rotoiti, but the only scheme adopted has been to establish the Matahina Dam on the Rangitaiki River with an installed capacity of 70,000 kW.
The damming of the Waikato River has created a number of extensive artificial lakes, so that it is now possible to drive through a landscape which to a considerable degree is man-made, for reflected in the still waters of the lake is the image of the coniferous forests which have been established largely during the past 40 years. There are two principal tracts of forest. The first, privately owned, is divided into two parts, one of which extends from Mokai in the south towards Atiamuri and thence on towards Kinleith and Tokoroa. The other part lies to the west of Kinleith and Tokoroa and extends towards the Waikato River around Mangakino, the net planted area being approximately 176,000 acres. The other principal tract of forest, State owned, lies further east in the Kaingaroa Plains. These forests were planted during a period of intense speculation when considerable doubts existed concerning the agricultural potentialities of the region and when owing to depressed economic conditions labour was cheap. Although most of the forests have since received very little proper silvicultural treatment and the plantings are far in excess of industrial needs, nevertheless they have formed the basis for the creation of an important pulp and paper industry in the post-war period. At Kinleith New Zealand Forest Products established their plant in 1952 for the production of kraft paper (capacity, 38,500 tons), kraft pulp (capacity, 91,000 tons), and sawn timber (capacity, 80 million board feet); whilst at Kawerau in 1955 the Tasman Pulp and Paper Co., of which the State is a shareholder, established their plant for the production of 60,000 tons of chemical pulp and 65,000 tons of mechanical pulp and, by 1962, of 200,000 tons of newsprint. In addition there is a tissue and lightweight paper plant at Kawerau and, at Whaka-tane, a cardboard plant, established in 1939, with an annual capacity of 38,000 tons. Kinleith and Kawerau are amongst the largest concerns in the Dominion and the industry is making a significant contribution to the economy generally and to the export trade of the country. In 1963 pulp and paper exports were valued at £6,905,054.
In the absence of a long winter the growth of the conifers has been rapid. Principal species are Pinus radiata , Pinus ponderosa, Pseudotsuga taxifolia (Douglas fir), and Pinus nigra vas calabrica (Corsican pine). Although by North Island standards the number of days with ground frost is high, at Rotorua 79.9, the climate on the whole is quite agreeable to livestock farming. Rotorua has a January mean daily maximum of 73.8°F and a July mean daily minimum of 37.2°F. The annual average rainfall is 53.7 in. and the number of rain days averages out at 151 days. The station records an annual average of 1,998 hours of bright sunshine.
In contrast to that of much of the North Island, the vegetation of the Central Plateau at the time of European settlement was of scrub, fern, and tussock grass rather than dense forest. Consequently, the barriers to settlement were not apparently overwhelming and, in fact, some parts of the region, for example, Moawhango and around the southern shores of Lake Taupo and the southern part of the Kaingaroa Plains, were taken up by the 1880s. Large flocks of Merinos and Cheviots were grazed and, in addition, near Reporoa a number of smaller farms were successfully established. The prosperity of the settlers did not advance, because among other things they encountered bush sickness which appeared as a loss of condition in the stock. This problem was at first circumvented by running the animals part of the time on land free of bush sickness, a practice which of course limited the extent of settlement considerably. A long-term solution to the problem was suggested by the experience of E. E. Vaile, who related the sickness to the absence of cobalt in the soil.