What type of economy?
New Zealand is like other developed economies in many ways:
- There is a comparatively high standard of living.
- Private owners make many economic decisions, but they work within laws made by the government.
- There is a large service sector (people working in transport, or serving food in restaurants). More people do this work than factory or farm work.
- New Zealand is a long way from the world’s markets.
- It is relatively small.
- There are few high-earning industries such as making cars or aircraft.
There are also some unique features:
From the 1850s until the Second World War, New Zealanders lived ‘off the sheep’s back’. Wool and sheep meat were exported mostly to the United Kingdom, earning most of the country’s income. Over a quarter of the workforce were in the farming industry.
By the 2000s only 1 in 10 workers were on the farm. Wool and meat were less important, although agriculture still brought in about half the money from overseas markets. Dairy products such as milk powder and cheese, fruits like apples or kiwifruit, and timber or wood pulp were the growth industries. Fishing also expanded. Squid, crayfish and hoki caught in New Zealand waters were eaten on tables in Asia.
Manufacturing and services
In the 2000s about a quarter of New Zealanders were employed in manufacturing or building. The country was exporting such items as dishwashers and electric fences, and Auckland was by far the largest area for factories.
Tourism became the main earner as international travellers poured in. Some came because of the America’s Cup yachting competition, or the movie The lord of the rings, which showed New Zealand’s dramatic scenery.
From 1900 to the 1960s well over 50% of exports went to the United Kingdom. By 2000 this had dropped to under 5%. The most important markets were in the Pacific region – Australia, Japan and the United States.