Kōrero: Industrial sectors

Whārangi 3. Secondary sector

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Inputs

There is a wide range of secondary, or manufacturing, industries in New Zealand. Food processing industries such as dairy factories, abattoirs and meat freezing works, and factories processing farmed and fresh-caught fish, depend heavily on the primary sector for their inputs of raw materials. Manufacturing industries rely on the transport services industry to carry produce to the factory door for processing.

The wood processing and paper product manufacturing industries have similar structures. Both depend heavily on inputs from the logging and forestry industry, but also use the transport services industry to move raw logs to the mill for processing.

Inputs of equipment

Other manufacturing industries, such as those making telecommunications equipment, need far more imported inputs than either the primary industries or their related processing industries, because they require machinery or electrical components and other equipment.

The basic metals industry – the Tīwai Point aluminium smelter and the New Zealand Steel mill at Glenbrook – needs high levels of physical capital (land, plant and equipment) and buys large amounts of electricity as another input. Tīwai Point also imports ore.

Petroleum refining uses high levels of physical capital and is especially dependent on imported inputs. It imports crude oil and other fuels and refines them into petrol for domestic users.

Inputs of wages

People are needed to work the machinery for the manufacturing sector, so industries which process primary products are more labour-intensive than primary industries themselves.

The meat and dairy processing industries of the secondary sector paid $1.7 billion in wages out of the national total of $70 billion in 2008. Other manufacturing industries, such as those making telecommunications equipment, were also relatively labour-intensive. In those industries, the largest wage bill was the $1.3 billion paid by the machinery and equipment manufacturing industries.

Viperous seats

In the early 1980s New Zealand had nine large firms assembling motor vehicles. By 1998 there were none. Since then a new secondary industry has grown up making and exporting vehicle parts and equipment, such as alloy wheels, tyres and headlights. In the early 2000s Racetech Seats, based in the Hutt Valley, made special seats for high-performance road vehicles, jetboats, pleasure boats and motorsport teams around the world. In 2002 the company won a contract to make the seats for the Dodge Viper, Daimler Chrysler’s first factory-made racing car.

Changes to inputs

After the 1960s the secondary sector required more local inputs, mainly because the expanding wood and wood products processing industry needed raw logs from the forestry industry. There have been even bigger changes to inputs imported from overseas. The closing of local manufacturing industries in the 1980s meant fewer of those industries imported goods.

Outputs

New Zealand’s secondary industries export a large proportion of their outputs, and contribute the bulk of New Zealand’s total export earnings. In 2008 export earnings from secondary industries were more than $40 billion. Exports from the meat and dairy processing industries were worth about $10 billion, and wood, pulp and paper exports were worth a further $2.5 billion. The steel and aluminium industries had made export earnings of more than $8 billion.

Changes to outputs

After the 1980s there were dramatic changes to the outputs of many industries within the secondary sector. The amount those industries sold directly as exports rose from 4% to over 25% by 2006, mainly due to the growth of the wood products and forestry processing sector. The amount sold to local consumers dropped from around 50% to 20%, due to the closure of vehicle assembly plants and clothing and textiles factories in the 1980s.

Me pēnei te tohu i te whārangi:

Ganesh Nana, 'Industrial sectors - Secondary sector', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/mi/industrial-sectors/page-3 (accessed 9 December 2019)

He kōrero nā Ganesh Nana, i tāngia i te 11 Mar 2010