Between 1960 and 2000 a number of developments shaped the regional character of the economy:
- new resource-based industries emerged in some regions
- debate took place on the need for government-assisted regional development
- manufacturing declined in importance
- tourism, recreation, horticulture and lifestyle choices shaped economic activity in some regions.
New resource-based developments
Large-scale manufacturing affected some regions:
- an aluminium smelter at Bluff in Southland contributed a significant wage and purchase bill to that regional economy
- Kāpuni and Māui gas fields in Taranaki were exploited from the 1960s, and in the early 1970s a number of downstream plants were also established
- a steel mill was built at Waiuku in South Auckland – it had an employment impact on the local district, but not on the region as a whole.
Debate on regional development
Differences between regional rates of growth prompted a debate on regional development in the late 1960s – should lagging regions be assisted, and if so, how?
The ‘lagging’ regions were those where extensive pastoral farming or other extractive industries were dominant, but not generating enough growth; for example on the East Coast, the West Coast and in Southland.
The development of manufacturing created another kind of inequality. Manufacturing for local consumers became concentrated near the largest markets: Auckland, Wellington and Christchurch. By 2000 Auckland was four times the size of the other two cities. Dunedin, which in the late 19th century had been New Zealand’s principal manufacturing centre, was disadvantaged.
In terms of employment and income levels, New Zealand did not have significant regional imbalances in the early 1970s. Regional development was provincialism by another name – regions lobbying for government spending, usually on infrastructure such as container ports, or items such as specialist university schools or the latest medical technology.
Decline in manufacturing
From the mid-1980s the government relied on the market to shape economic decisions by workers, employers or investors.
Import licensing and tariff protection were scrapped, and a lot of manufacturing became uneconomic. The manufacturing labour force fell from 24.7% of the total labour force in 1976 to 12.9% in 2000. There was a change in the character of regions where manufacturing had been important. The demise of car assembly in Wellington, its major centre, contributed to manufacturing employment falling from 18.7% of total employment in 1976 to 9.8% in 1996.
Closure of many government services and rationalisation by private firms made regional economies thinner, with fewer possibilities for growth.
Tourism, recreation, horticulture and lifestyle
Tourism became a major sector for the Volcanic Plateau, the West Coast and Central Otago. In the West Coast it outranked mining, forestry and farming as a source of income. On the Volcanic Plateau tourism and recreation had long been important, but their significance increased with the relative decline of forestry.
The growth of horticulture, in particular vineyards, caused new economic and settlement patterns to develop, notably in Marlborough and parts of Central Otago. Vineyard visits became popular with tourists.
In the vicinity of major cities, and also in areas such as Central Otago, economies grew and reoriented themselves as people moved for lifestyle reasons. Queenstown Lakes was the fastest-growing district in the South Island in the early 2000s. Retirement movement to ‘sunbelt’ towns led Nelson to grow faster than Invercargill, Kāpiti faster than Porirua, and Tauranga faster than Rotorua.
On the outskirts of cities such movements were more diverse and less age-specific. On the outer margins of Christchurch and Auckland, new settlement revived economic activity in many otherwise declining towns, but it extended urban influence rather than creating new regional economies.