Story: Regional economies

Page 2. Development of regional economies, 1850 to 1920

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From around 1850 the principal economic activity through parts of the lower North Island and much of the South Island came to be farming sheep for wool. Flocks were pastured across the grasslands on the eastern plains and basins of both islands. The wool was exported.

Towns and ports became points of intersection between the sheep runs and their distant markets, as well as channels for imports. With ports serving distinct hinterlands, a series of economic regions was created.

The South Island and the lower and upper North Island developed at different paces. The South Island was earliest, followed by the lower North Island and then the upper North Island.

South Island

Most of the farmable parts of the South Island were in pasture or crops by 1880. Nelson, Blenheim (with its port of Picton), Christchurch (with Lyttelton), Timaru, Ōamaru, Dunedin (with Port Chalmers) and Invercargill (with Bluff) were all agricultural service towns with ports for their regional economies.

In the 1880s large areas in such regions switched from growing crops to pasture, as the frozen meat trade to the UK flourished.

The West Coast was the exception to the South Island pattern of economic regions. Initially opened up by gold miners in the 1860s, by 1920 its economy was dominated by coal mining, with Westport the centre for the northern (Buller) region, and Greymouth servicing the central and southern (Westland) region.

Dredging for gold flourished in Central Otago in the 1890s and 1900s, but waned thereafter. Mining outside the West Coast was not a feature of whole regions, but of individual settlements such as Kaitangata in Otago, and Nightcaps in Southland.

Lower North Island

In the North Island, Hawke’s Bay and Wairarapa, both with much open land, developed first. Hawke’s Bay had its own port at Napier. Wairarapa runholders used Wellington once a rail connection was established in 1878.

Elsewhere in the lower North Island control of land was gained from Māori, and extensive tracts of forest were cleared, after which regional economies developed. There were three focal points:

  • New Plymouth, which was the port and principal town for the dairy districts of Taranaki
  • Whanganui township, which was the port for a vast pastoral region extending inland to Mt Ruapehu
  • Palmerston North, which was an inland ‘port’ – a hub for rail communications and a centre for rural Manawatū.

Upper North Island

The kauri harvest dominated the economy of the upper North Island – the old Auckland province – until 1910. Together, kauri and kauri gum accounted for 58% of the province’s exports in 1885. A fair proportion was exported through the port of Auckland, which was by far the principal port nationally for inbound goods. A network of coastal shipping routes linked smaller ports in the region to Auckland.

Story of a New Zealand region


Jane Mander’s The story of a New Zealand river (1920), about life in a timber settlement on the Kaipara River, for which Auckland is ‘town’, captured the contours of the provincial economy of the north at the onset of the 20th century.


Second only to kauri product was gold, which was mined by business enterprise on the Coromandel Peninsula, mostly financed from and exported through Auckland.

Rotorua was the centre for a fledgling tourist region economy that reached to Lake Taupō, Mt Ruapehu and the headwaters of the Whanganui River.

Farming was not economically important in the north of the North Island before 1900 – soils and climatic conditions did not suit the pasturing of sheep, and there were only local markets for the production of butter and cheese. The East Coast was an exception – its pastoral economy was ecologically an extension of Hawke’s Bay, but it developed a distinct regional economy around the town of Gisborne.

After 1900 dairying expanded rapidly in Northland, Waikato and the Bay of Plenty, and sheep farming expanded in the King Country. Auckland continued to be the principal port for these districts, but population increases and the development of urban centres – notably Hamilton in Waikato – created new regional economies by 1920.

How to cite this page:

Malcolm McKinnon, 'Regional economies - Development of regional economies, 1850 to 1920', Te Ara - the Encyclopedia of New Zealand, (accessed 20 May 2022)

Story by Malcolm McKinnon, published 11 Mar 2010