Tourism cushions dairying downturn
Industries such as tourism are helping cushion the dairying downturn in the south, but adding value to existing businesses and exploring new opportunities are also crucial, business leaders say.
On Thursday night, Finance Minister Bill English told a Southland audience the region needed to reignite its positivity to ward off negative perceptions around a short-term drop in the dairy industry. He also said that while dairying was a very important industry, other sectors were helping cushion the blow and that Southland’s economy was in a pretty good place overall.
Statistics appear to back up this sentiment with the 2014 Southland Economic Profile showing that primary production employment and GDP had both grown significantly in the region in recent years. As well, education and research, tourism, construction, health and care services had also performed well. Manufacturing was the only major sector in which both employment and GDP had fallen in the longerterm, the report, commissioned by Venture Southland and carried out by Business and Economic Research Ltd (BERL), says.
Southland has the lowest housing costs and highest employment rate of any region in the country and in the year to March 31 had the largest increase in regional GDP.
Venture Southland group manager business and strategic projects Steve Canny said tourism was the star performer in the south at the moment.
‘‘There’s been a very dramatic increase in tourists coming to Southland and Fiordland.’’
Milford Sound had its busiest season with more than half a million visitors and this pulling power helped drive the region’s tourism industry as a whole with food producers, the service industry and accommodation providers all benefiting, Canny said.
Southland needed to better highlight its natural advantages, which were sometimes lost when attention focused solely on commodity prices. Exporters were trying to crack the difficult challenge of how to move up the value chain to export premium products, he said.
Southland Chamber of Commerce chief executive Sarah Hannan said the themes English touched on mirrored some of the discussions the Southland Regional Development Strategy steering committee had been having. These centred around supporting and extending foundation industries but also looking at new industries where possible, she said.
‘‘To achieve greater diversity in the economy, it will be imperative that we work actively to attract a greater diversity of people and talent to drive innovation.’’
Steering committee chairman Graham Cooney said it was important New Zealand was not too reliant on one industry. A good deal of the committee’s report would hopefully identify the generic blockages holding back Southland businesses, he said.
The BERL report says Southland’s main commodity and service groups – aluminium, dairy, fishing and aquaculture, forestry, meat, tourism and wool, produced $3225 million in 2013, or 14.4 per cent of New Zealand’s exports in the same groups.