Positive vibes boost mood
returns in international markets. Mr Findlater says some of the benefits of that are starting to be reflected in the wider regional economy. ‘‘Our primary sectors have been holding their own for some time [and] now they’re actually seeing the benefit of hanging in there. That’ll be reflected in their returns, which then means they’ll be able to spend more across the region that everybody will benefit from.’’
He predicts trends of people spending more will continue. ‘‘I don’t think that’s just a short-term thing. People are generally feeling positive about things.’’
Mr Alexander echoes Ms Kettle’s and Mr Findlater’s optimism, saying most of Nelson’s top five industries are going to do well this year, though he says horticulture ‘‘goes up and down like a yoyo’’ and has to be taken as it comes. He also expects housing to grow strongly, away from the crazy prices seen in Auckland and Christchurch and into other parts of the country. ‘‘I’d definitely expect Nelson to be benefiting from that,’’ he says.
He pins that partly on young buyers looking for better value and investors looking for better yields, but also on the nation’s greying population, as baby boomers, in particular those in Auckland, look to cash up and ‘‘retire somewhere better’’. The region’s mayors agree. Nelson Mayor Rachel Reese says the economy is coming out of a fairly tough five years and her feeling is that there is a positive mood in Nelson. ‘‘Unemployment is lowest in the country and I know there are people out there that are underemployed, but I’m looking forward to a strong winter season leading up to a stronger tourism season. I think we’re looking in good shape.’’
She says improvements in the construction sector – new projects coming in – are a good sign that the economy is picking up as confidence increases.
Tasman Mayor Richard Kempthorne says he’s noted the increase in business confidence in New Zealand, and says it’s clear that several economic sectors – horticulture, forestry, and dairy farming – have had a good year.
‘‘There’s probably a lot more positivity than there has been for a couple of years, so I think both New Zealand and local confidence is significantly strengthened,’’ he says. He acknowledged that many were still facing ‘‘challenging times’’. ‘‘It’s not just all one way. But I think we’re in a good space for being a lot stronger than we have been for a few years.’’
Devastating weather events were hideously expensive and impossible to predict, but Mr Kempthorne believes the recent storms had some benefits – they taught local authorities how to respond to them, and they were now more capable. ‘‘We are in a resilient space.’’
Port Nelson chief executive Martin Byrne says that the year is off to a good start, particularly with the large offshore vessel Raroa moored in Nelson for repairs late last year. ‘‘We’re cautiously optimistic, which I think is how everyone sees it at the moment,’’ he says.
Nelson Pine Industries managing director Murray Sturgeon says 2013 finished ahead of plan. Although most people think the Christchurch rebuild will last for five years, he’s predicting it will roll on for a good 35 before the CBD is back to a whole new normal.
‘‘Christchurch will come back and it will be better, [and] probably accustomed to a new style of building concept down there.’’
Orders on MDF and LVL (laminated veneer lumber) were booked out until May, with heavy demand for LVL in Christchurch; the company is promoting wood as an attractive and earthquake-safe alternative to concrete and stone. The business is planning a full year working at capacity. There is high demand for logs in China, which is putting pressure on supply.
‘‘We just have to work a bit smarter in export markets; there’s a lot of competition out there but our quality seems to stand us in good stead and we have a pretty reliable base of customers. It’s not always price that wins orders, but service and stable delivery as well.’’
Wilson’s Abel Tasman chief executive Darryl Wilson says the park is seeing a lift in visitor numbers and expenditure, though not yet at levels seen before the global financial crisis.
‘‘We’re very positive nevertheless. The mood of the nation seems good, and internationally also.’’
British and American travellers are returning, and growth markets include those from France and Israel. The latter were beginning to spend more.
‘‘Predominantly we’ve had [Israeli] backpackers, and now we’ve got the backpackers’ parents. They like New Zealand and they like our region, [and] word of mouth is still our strongest ally when it comes to spreading the word of the beauties of the Nelson region.’’
However, he says it’s important to realise the value of regional marketing initiatives.
‘‘These things don’t just happen; there’s been a lot of work behind the scenes changing this, and it’s important we don’t think it all comes from nowhere. The hard work has been fairly unfulfilling over the past few years, but it seems to have [got] a good result when things have come right.’’
Sue Brown, the provincial president of Federated Farmers Golden Bay, says there are a lot of good signs, but ‘‘it’s a cautious approach’’. ‘‘Farmers are relieved to have a good payout this year and the weather seems to be going well in most places, but the signs are [prices] will be lower next year.’’
She says severe weather events are always a big worry for farmers.
‘‘The real concern out there at the moment is potential rise of interest rates, and I’m not sure our economy has picked up sufficiently to handle that yet.’’
Nelson, the largest fishing port in Australasia, is home to the two largest fish processing companies in New Zealand. Sealord general manager Doug Paulin said he was feeling ‘‘very positive’’ about the seafood industry from a catching and sales perspective.
‘‘Things are progressing very well. The strong dollar is a concern but we have pretty strong foreign exchange hedging programmes.’’
Mr Paulin said fishing had been ‘‘very good’’, with pricing on the majority of the company’s products strong. The lifts in prices had begun from about mid last year, and demand was unrelenting, he said. ‘‘That’s not going to reduce. In terms of pricing – it’s in the lap of the gods.’’
On the aquaculture side, New Zealand Marine Farming Association executive officer Graeme Coates says there will be continuous growth in mussel farming of about 5 to 10 per cent in Golden Bay and Tasman Bay over the next 10 years, which should be ‘‘pretty positive’’ for the region.
The mussel industry exports to more than 40 countries, with its biggest market being frozen halfshells for the United States. Mr Coates predicts a bigger move into nutraceuticals and health products from mussels, with more higher value branded products coming on board: ready-to-eat products such as frozen or freshchilled. More mussels mean more jobs, both on the vessels and on shore-based facilities and factories.
However, he says more infrastructure needs to be built in Golden Bay to meet those growing needs, a view that has been controversial lately.
‘‘There needs to be some decision made by the Ministry of Primary Industries and the Tasman District Council in terms of enabling the industry to fill up those areas that have already been approved by the Environment Court,’’ he says.
‘‘From the industry’s point of view, to do it is not hard; it’s actually getting the infrastructure in place to be able to do it, and to get the consents and permits and all that in place.’’
Back on land, apples are about to be harvested, but Pipfruit NZ chair Nadine Tunley says it’s ‘‘massively crystal-ball gazing’’ to try to predict what the year will bring.
Prices moved substantially for the industry last year, which was positive, but she says New Zealand supplies just 0.2 per cent of the global supply of pipfruit. ‘‘We are massively insignificant in terms of volume.’’
Current output depends on trees planted about seven years earlier, so she says turn- ing around a season can be like ‘‘trying to turn an oil tanker versus a fizzboat’’.
‘‘There’s no reason those [sales prices in the market] shouldn’t continue for 2014. But it always comes down to supply and demand and we don’t ever get a good handle on that until into the season,’’ she says. ‘‘At the end of the day you would like to say the industry is going to be buoyant, and there’s no reason it shouldn’t be, but we like to keep it tempered.’’
Prices depend on such events as a vicious hailstorm in Chile or South Africa, our main competitors. ‘‘Anecdotally, there were not the same weather events for the northern hemisphere in 2013/14 that there were for 2012/13. America had a massive weather event last season they haven’t had this year. But South Africa’s gone and had one and what the full impact of that is, we’re yet to get a firm idea on.’’
All say the only drawback to these bursts of positivity is the high New Zealand dollar, which is hampering progress. Mr Sturgeon dreams of seeing the dollar back in the 70-cent range against the greenback – lately it’s been hovering around 85c.
‘‘I don’t believe we’ll ever see it. We’d like to see some relief on the exchange rate, but we’ve got a pretty finely tuned business and roll with the punches.’’
‘‘If that was to drop back, we’d be buzzing,’’ Mr Findlater says. ‘‘Our sectors have worked hard to improve their productivity, but unfortunately the hard work they’ve been doing isn’t reflected because of the high exchange rates.’’
Mr Alexander advises those in tourism in Nelson and Marlborough to check their dependence on Australian visitors for the coming years; Australians may shy away from visiting here, with their dollar no longer buying what it used to. However, he says improvements in the US and UK economies could mean more Brits and Americans coming our way.
As usual, however, there are warnings not to rely too much on economists. Nelson food producers have lately been hit by Australian supermarket restrictions, and others say that with the weakening economies of our two main trading partners, Australia and China, the country could see more modest growth. New Zealand is at the mercy of global forces outside its control – we are tied inexorably to Australia. As one commentator recently put it, when it suffers, we suffer.
Yet, Mr Findlater says, Nelson is still a pretty good place to live. ‘‘I think we’ve got everything in this region that the rest of the world is going to want in the future.’’