Boom during depression
The 1880s has been described by some economic historians as New Zealand’s ‘long depression’. As markets, credit and purchasing power contract in a recession, manufacturing should have faltered. But instead of shrinking in number or experiencing factory closures, New Zealand manufacturing did the opposite.
Between 1881 and 1891 the number of factories in New Zealand rose more than 56%, while industrial employment increased 66% – almost three times faster than the population growth over the same period.
Why did this happen? Prices were falling, especially in property and commodities, which meant that purchasing power increased. Continuing population growth meant there was a growing market for manufactured goods. At the same time, new industries, such as hydraulic gold mining, dairy processing and meat freezing, added entirely new forms of industrial endeavour.
From import-intensive to export-led
Because of its continuing growth, manufacturing during the 1880s had a noticeable import substitution effect. Larger domestic markets and an oversupply of labour in some towns helped make local production competitive with imports. New firms began producing sugar, cement, footwear and coaches, reducing New Zealand’s need to import these and other manufactured items. Increased industrial capacity was an important element in moving New Zealand from an import-intensive economy (as it had been up to the 1880s) to an export-led economy, as it was from 1887 onwards.
Innovation was a hallmark of early New Zealand manufacturers. In many cases, an entrepreneur manufactured a new product that broke into the existing market, resulting in a successful business. Examples include Henry Shacklock’s popular Orion stove, which burnt local lignite coal effectively, and Thomas Edmond’s baking powder.
When imported machinery wasn’t big enough, heavy enough or loud enough, manufacturers Alfred and George Price would solve the problem. Their ‘Big Pump’ drained mines, replacing an Australian pump that was too light; their timber jack was a heavy lifter, used in preference to a Belgium import; and their firebell was not only loud but ‘of excellent tone’, and replaced one of English manufacture.
Value of manufacturing
By 1900 New Zealand’s manufacturing output was worth £17 million ($3.3 billion in 2019 terms), produced from 4,228 ‘manufactories’. Of this, 24% was consumer goods (food, beverages, footwear, wood products, saddlery and light metal items), just under a third was agricultural and building equipment, and the remainder (about £4 million) was from processed agricultural products for export such as frozen meat. This compares with £3.7 million earned from exporting wool.
Size of manufacturers
The majority of New Zealand’s early manufacturing plants were small or medium-sized, staffed by the entrepreneur and a few staff. The average staff of New Zealand manufacturing plants in 1900 was 13.
There were notable exceptions. The biggest factories in New Zealand were in the woollen industry (average size 169 staff) and the clothing industry (average size 120 staff). Some individual employers had larger concerns, such as the Chelsea sugar works in Auckland with over 250 staff, and Hallensteins clothing factory in Dunedin, with over 400 staff.
In 1906 the manufacturing workforce was 56,359, of whom 14,657 (over a quarter) were in Auckland.