Taranaki regional development agency, Te Puna Umanga/Venture Taranaki, has launched the Winter 2023 edition of Taranaki Trends.
The six-monthly publication explores how our regional economy is tracking and includes key economic indicators for the May 2023 quarter.
The winter edition was launched alongside the latest six-monthly Taranaki Business Survey results at Positioning for the future, an event hosted on Tuesday, June 27, and facilitated by Stacey Hitchcock, deputy CE/GM Investment at Venture Taranaki.
“We are going through an unsettling period of change and disruption in the way we operate our businesses, particularly in our key farming and energy sectors,” says Stacey.
“Many factors are at play from environmental concerns, extreme weather events, changing consumer habits, new technologies, and wider global unrest.
“Today’s event was a great chance to bring our business community and those interested in the state of our economy together, to dive into the latest Taranaki business confidence insights, and explore how we can turn this evolving landscape into growth opportunities for Taranaki.”
A panel of Taranaki leaders including Trish Rankin, Mayor Neil Holdom, Justine Gilliland and Simon Craddock, got beneath some of the top disruptors, from artificial intelligence to energy transition implications – and how Taranaki industries can leverage these for success.
The event was a timely discussion, with the recent announcement that New Zealand is now in a technical recession, as GDP declined for a second consecutive quarter in March, following a 0.7 epr cent decline in December.
“The economic snapshot in the recent Taranaki Trends publication highlights that the Taranaki economy demonstrates remarkable resilience despite entering this recalibration phase,” Venture Taranaki director, strategic and sector partnerships Anne Probert.
The Provisional GDP (based on 2022 prices) was $10,045 million in Taranaki for the year to end March 2023, and up 0.6 per cent compared to the previous year.
“The export value growth rate in Taranaki also increased to 15 per cent, outpacing the New Zealand rate of 10 per cent.This places us in the top 4 increases in growth rate regionally for 2022,” says Anne.
The event also highlighted the region’s tight labour supply, with high employment levels and a comparatively low employment rate (2 per cent in the year to March 2023).
However, Taranaki has experienced a stable increase in migration numbers, signalling a positive sign for the region’s workforce.
After the reopening of borders, migration numbers have nearly reached pre-COVID levels. This development is encouraging, as it indicates the region’s ability to attract skilled individuals, supporting future economic growth and development.
Findings showed consumer spending is up 10.2 per cent over the year to March 2023, driven by both high inflation but also sustained household consumption and a tight labour market.
Increasing prices of day-to-day expenses can be felt across the board, and effects can be seen in the construction industry in particular, with the number of new residential building consents decreasing by 29.7 per cent to the year end March 2023, compared to the previous 12-month period.
Median house prices in Taranaki fell to $534,000 in May 2023, a 15.9 per cent decrease compared to May 2022.
“It’s clear this has been a very challenging period for the construction industry, with high interest rates, increasing construction costs and falling house prices all coming in to play,” says Anne.
On a positive note, visitor spend in Taranaki saw an impressive increase of 20.6 per cent compared to the year ending April 2023.
This growth, even when accounting for inflation, is significantly noticeable compared to the figures reported in 2022. Monthly visitor spend has also showcased a notable recovery compared to pre-COVID levels, both domestically and internationally.
The latest results from the 6-monthly business survey highlighted that 49 per cent of Taranaki businesses believed the general economic situation in New Zealand would deteriorate, while 15 per cent thought it would improve and 28 per cent anticipated it to stay as is.
“There was a more optimistic view of the region,” says Anne, “and although 41 per cent recognise conditions will be tight in the next 12 months, 18 per cent anticipated there will be improvements.
“Furthermore, the majority of businesses also expected their employee numbers would hold firm in the next six months (65 per cent) or increase (19 per cent)”.
Business Survey respondents also ranked key issues they believed would have a higher impact on Taranaki in the next five to seven years. The top concerns included farming and food production (32 per cent), climate change regulations (30 per cent), transport modes including freight (28 per cent) and changes in talent and skill sets (27 per cent).
Other factors such as the impact of artificial intelligence on work, emerging technologies, digitisation, new energy forms, and the potential use of smart materials in construction and components in the future were also highlighted.
Stacey says that while navigating the near term is important, business and industry need to be prepared for these potential disruptors over the next seven years.
“We want to ensure our business community are equipped with the knowledge and insights about these big-ticket issues for Taranaki, so that they can be proactive and forward-thinking in their strategies to achieve business success in 2030 and beyond.
“Today’s event was a fantastic chance to discuss what can be done to transform these challenges into opportunities for our region,” says Stacey.
The latest Winter edition of Taranaki Trends is available online at: venture.org.nz/regional-intelligence/taranaki-trends/
The latest Business Survey is available online at: venture.org.nz/regional-intelligence/business-survey/
