In the interwar years, population and settlement did not expand in Otago as they did in the North Island dairying regions. While industrial employment grew in North Island centres, in Otago there was a slight decline.
Both city and region were hard hit by the depression of the early 1930s. Dunedin’s population fell by 3,000 between 1926 and 1936, to 82,000.
Between the late 1940s and early 1960s rural prosperity, due to higher prices and improved farming practices, led to urban growth. Smaller centres had stopped growing, but Ōamaru’s population increased by 75%, Balclutha’s more than doubled, and Alexandra’s and Mosgiel’s tripled. Mosgiel’s population increase was partly due to overspill from Dunedin. Dunedin itself grew by more than a quarter, to 105,000.
The fastest post-war growth occurred in ‘hydro towns’ – towns developed especially for the construction of dams and hydroelectric power stations. These were Kurow in the 1920s and Ōtemātātā in the 1950s and 1960s, both on the Waitaki River, and Roxburgh on the Clutha in the 1950s. Cromwell was a long-established town, but grew rapidly in the 1980s as the base for the Clyde dam project, which flooded part of the town.
The boom towns since the 1990s have been the tourist and holiday centres of Queenstown, Arrowtown and Wānaka.
In November 2008, Statistics New Zealand figures showed that Tauranga had overtaken Dunedin as New Zealand’s fifth largest city. The announcement prompted an outburst of rivalry between the two centres, including a Tauranga-inspired billboard in Dunedin advertising the northern city, video clips on YouTube, and a Facebook group called ‘Tauranga – just better’. Dunedin mayor Peter Chin claimed that the figures were misleading because they excluded some Dunedin communities.
In 1966 it was remarked that ‘in relation to the population of the hinterland a further concentration of population in the Dunedin region seems unlikely’ 1.
Dunedin’s urban population in 2013 was 112,000, the same as in 1976. The city’s population had not fallen thanks to its university and medical school – institutions that are funded from a national, not a regional or city, budget.
In 2013 agriculture, forestry and fishing were major employers in the Central Otago and Clutha districts. They accounted for a third of the labour force in these regions, and 15% in Waitaki, compared with a national figure of 5.7%.
Almost 30% of the Queenstown Lakes labour force worked in the hospitality industry in 2013, compared with 6.9% nationally, and 6.4% in arts and recreation, compared with 1.9% nationally.
In Dunedin, dominated by the university with its medical school, the education and health sectors accounted for almost 30% of the labour force, compared with 20% nationally.