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Story: Regional economies

Farming has been important in many regional economies for over a century, but people find most jobs in New Zealand’s towns and cities. Spectacular scenery in Central Otago and on the West Coast makes tourism a big player in the economy of these regions, although viticulture and mining also feature.

Story by Malcolm McKinnon
Main image: Hāwera, 1948

Story Summary

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Early economic regions

After Māori had plundered moa and seals they mainly settled in the upper North Island, where horticulture was easiest and birds for snaring were plentiful. Fewer people lived on the coasts of the lower North Island. The South Island was a prized source of pounamu (greenstone) but very few people settled there.

The first European trade was for timber, flax, seals and whales, as well as food. In areas where large numbers of Māori lived, trade settlements grew up. Māori traded produce for manufactured goods and cloth.

1850 to 1920

From around 1850 the main economic activity was farming sheep for wool, which was exported. Most of the parts of the South Island that could be farmed had pasture for sheep, or crops, by 1880. In the 1880s some crop farmers switched to pasture when frozen meat and dairy produce began to be exported to the UK. Gold mining boosted economies in the South Island for a time, on the West Coast and in Central Otago. Coal was also mined on the West Coast.

In the North Island sheep were farmed in Hawke’s Bay and Wairarapa on open land. As land was gained from Māori, forests were cleared and farming expanded, including dairying, especially in Taranaki. In the northern part of the island kauri trees and kauri gum were important to the economy until they began to run out. After 1900 dairying expanded rapidly in Northland, Waikato and the Bay of Plenty. Auckland was the main port for those regions. Many South Islanders took up land in the North Island.

Regional economies, 1920 to 1960

Over time towns and cities grew faster than rural areas, and in Canterbury, Wellington and Auckland manufacturing became important. As well as meat freezing, and butter and cheese production, there were manufacturers assembling cars – this was economical because the government put taxes (called tariffs) on imported cars.

From the 1940s to the 1980s many hydroelectric schemes were built. For a time in regions such as the Volcanic Plateau the hydro workforce had a big impact on the local economy. The pine forests on the Volcanic Plateau began to be harvested in the 1950s and large pulp mills were built at Kinleith, near Tokoroa, and at Kawerau.

Regional economies, 1960 to 2000

From the 1960s there was some large-scale manufacturing. An aluminium smelter built at Bluff had a major impact on Southland’s economy. Gas from the Kapuni and Māui gas fields made a difference in Taranaki’s economy. There was a steel mill built at Waiuku in South Auckland.

Manufacturing took place mainly in Auckland, which grew to four times the size of Wellington or Christchurch. In economic reforms in the 1980s tariffs were gradually scrapped, and by 1998 cars were no longer assembled in New Zealand. This meant a big decline in manufacturing in Wellington where most cars were made.

There was always tourism in Rotorua, but from the 1980s tourism also became important on the rest of the Volcanic Plateau, on the West Coast, and in Central Otago. Some regions benefited when people moved to have a better lifestyle, including retired people.

Regional economies, early 2000s

Large universities, such as Massey in Palmerston North and Otago in Dunedin, made a big difference to the economy of some regions. Regions with no hospitals had far fewer people working in health.

Farming was still very important in many regions, although not many people were employed in farming. However around 15% of the labour force worked on farms in Southland, Marlborough, the East Coast, South Canterbury and Wairarapa in 2006. In the King Country over a quarter of all workers were employed in farming.

Auckland and Wellington had high numbers of people working in information, financial and professional jobs – they accounted for 18.2% of the workforce in Auckland and 21.3% in Wellington in 2006.

How to cite this page:

Malcolm McKinnon, 'Regional economies', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/regional-economies (accessed 22 May 2018)

Story by Malcolm McKinnon, published 11 Mar 2010