In 2001 the manufacturing sector contributed about 16% of gross domestic product (GDP), down from the 25% typical of much of the 20th century. In part this reflected the trend occurring in rich countries, but it was also a result of the elimination of all import licensing and of most tariffs from the mid-1980s. Even so, about a quarter of a million New Zealanders work in the sector.
The largest subsectors were food, beverages and tobacco, followed by machinery and equipment. Auckland was the largest centre for manufacturing in 2001, with 35% of the 235,000 manufacturing labour force.
Range of production
There was a great variety in the range and type of industry. The food, beverages and tobacco subsector included large industrial plants processing livestock and milk for international sale, as well as small businesses providing food for local consumers to take home. Successful world-class manufacturers included producers of domestic and office furniture, electric fences, dairy products, wine, chemicals, retail point of sales systems, production systems for domestic appliance manufacturers, rock-crushing equipment and mobile radios, among other things.
In 2001 the largest industrial works in New Zealand included the aluminium smelter at Tīwai Point near Bluff, petrochemical factories in Taranaki, wood-processing factories at Kawerau in Bay of Plenty and Kinleith in Waikato, the huge dairy factory at Te Rapa in Waikato, the steel mill at Glenbrook, just out of Auckland, a whiteware plant in Auckland, and the oil refinery at Marsden Point, Whangārei, plus freezing works throughout New Zealand.
With the end of border protection, manufacturing based on assembling imported components to supply domestic markets almost entirely disappeared. As well as those which domestically process New Zealand’s primary production, often for export, there is now a flourishing manufacturing export industry based on New Zealand skills and innovation. Many manufacturers began exporting to Australia, facilitated by the Closer Economic Relations agreement (CER), and the earlier New Zealand–Australia Free Trade Agreement (NAFTA).
Despite home ownership declining from the mid-1990s to 67% in 2001, the freehold home remains an important aspiration for many New Zealanders. Building new homes is therefore a significant economic activity. Residential construction is normally about 60% of all building by value, and in 2000 the whole industry employed over 100,000 people and contributed over 4% of GDP.