Most of the towns and cities have been established to service the rural areas; to process and distribute their products. Their growth, therefore, is closely related to the productivity of their respective regions: hence the Canterbury Plains and the Waikato regions have stimulated the growth of their urban areas to a greater extent than less-productive districts.

At certain periods of the country's history other commodities have originated urban settlement: the exploitation of native timber created mill towns; the Otago goldfields gave great impetus to the development of Dunedin in the sixties of last century and created other towns such as Alexandra and Roxburgh; but the impetus ceased as the activities declined. On the West Coast of the South Island there are extensive coal fields serviced by towns like Greymouth and Westport. These are based upon a more stable industry but in recent years the universal use of oil fuel has checked their steady growth. In most cases the continued development of the towns based upon these transient activities have been due to the slower but more permanent influence of pastoral or agricultural development.

In recent years the timber industry has assumed fresh importance with the processing and marketing of exotic plantations. This has created new towns, such as Kinleith and Kawerau, which have developed rapidly: a growth that would appear to have greater permanency as the scientific farming of trees is less transient than the wholesale cutting of native forests.

The population of New Zealand in 1858 was approximately 100,000; in 1911 it exceeded a million and the 1961 census brings the figure close to two and a half million, a number far beyond the employment capacity of rural activities restricted by the available suitable land. Consequently the urban population has increased very rapidly. In 1956 it was 62·6 per cent in all urban areas. The latest (1961) official figure is nearly 63·6 per cent of the total population. The larger urban areas, stimulated by this increased labour force and by other economic factors, have turned more and more to industry as a major employment enterprise. This recent change in function will in time modify the character of the larger urban areas as they become productive in their own right; but to be free from their past dependence on rural production they must be able to compete in the world markets and thus produce their share of overseas exchange. At the moment this is not the case as the industries are in large measure dependent upon the earnings of the rural community for the purchase overseas of their basic materials and equipment.