Table 4.4 Taranaki industries reliant on oil and gas
Taranaki Oil & gas sector
Services to mining
98.31
Other mining and quarrying
74.76
Computer services
28.63
Non building construction
20.36
Other business services
18.76
Insurance
14.77
Ancillary services to construction
14.36
Other non-metallic mineral product manufacturing
13.71
Air transport, services to transport and storage
10.68
Technical services
9.83
source: BERL, Butcher & Associates
% of contributor
industry output
Of particular note are the services to mining and the other mining and quarrying industries.
These two industries are very dependent on the oil and gas sector in Taranaki, with 98
percent and 75 percent respectively of all output in these industries acting as inputs to the oil
and gas sector.
Computer services, non-building construction, and other business services each contribute
more than one-sixth of their output to the oil and gas sector.
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4.3 Dairy
sector
The dairy sector in Taranaki is made up of two industries at the 114 industry level. The two
industries are dairy cattle farming and dairy product manufacturing.
Table 4.5 shows the contribution of the dairy sector to the Taranaki economy and to the
national dairy sector in 2006.
Table 4.5 Taranaki dairy sector
Taranaki Dairy sector
Total
% of regional
% of national dairy
Employment (FTEs)
6,155
13.61
13.78
GDP ($mn)
732
16.71
14.42
Business units
2,909
22.74
16.11
source: BERL regional database, Statistics NZ
The dairy sector employed around 6,160 FTEs in Taranaki in 2006 (14 percent of regional
employment) in more than 2,900 businesses (23 percent of regional businesses). Between
them, these employees produced $732 million in GDP, or 17 percent of regional GDP.
The importance of the Taranaki dairy sector to the national dairy picture is evident from the
fact that it accounts for around 14 percent of national dairy employment and GDP. In
addition, it provides more than 16 percent of the national dairy sector’s business units.
Projecting changes in the dairy sector is difficult due to the fact that, at least on the
manufacturing side, the sector is dominated by a few large businesses. A decision to
expand or reduce operations by any one of the major players can have a large impact on the
sector in the region. It is important to keep this in mind when projecting likely changes.
Based on recent performance of the sector, employment growth is expected to be relatively
modest over the next 20 years, with stronger gains on the manufacturing side than the
farming side. Nevertheless, rises in labour productivity should see a steady increase in dairy
sector GDP. More detail on likely rises in employment and GDP are introduced in section 5.
The employment multiplier in the dairy sector in Taranaki is relatively high, at 2.51. In other
words, creating one new dairy FTE will lead to 1.51 further FTEs being employed in the
region.
This is largely the result of a very high employment multiplier within dairy product
manufacturing, which relies on inputs from many other industries. Therefore, increasing
employment by one FTE in dairy product manufacturing requires substantial increases in
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production within its supply industries, with the result that those industries must also employ
more workers.
Table 4.6 presents the make-up of the Taranaki dairy sector’s inputs and outputs. It also
shows the sector’s contribution to each category of regional inputs and outputs.
Table 4.6 Taranaki dairy sector total inputs and outputs
Taranaki Dairy sector
% of sector
% of regional
Inputs
Intermediate inputs
46.56
10.83
Imports
20.55
9.14
Wages and other household income
14.63
16.28
Other inputs
18.26
15.16
Outputs
Intermediate outputs
38.24
8.89
Exports
60.04
22.82
Household and government consumption
1.13
0.96
Other outputs
0.58
1.25
source: BERL, Butcher & Associates
Almost 47 percent of the sector’s inputs come from industries within the region, as explained
in more detail below. The sector imports nearly 21 percent of its inputs from outside the
region. This represents 9.1 percent of the region’s total imports. Other inputs such as
depreciation and operating surpluses account for 18 percent of inputs.
Wages and other household income accounts for close to 15 percent of dairy sector inputs.
The size of the dairy sector in Taranaki ensures that dairy sector wages and other household
income represent 16 percent of all wages and other household income in the region.
As much as 60 percent of the sector’s output is exported to the rest of New Zealand or
overseas. The dairy sector is the largest export industry in Taranaki, accounting for nearly
23 percent of the region’s exports. Just over 38 percent of the sector’s outputs feed into
industries in the Taranaki region.
Table 4.7 presents the top ten industries by contribution to dairy sector inputs in Taranaki.
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Table 4.7 Taranaki dairy major input industries
Dairy cattle farming
36.19
Wholesale trade
1.13
Fertiliser manufacturing
0.98
Electricity generation
0.89
Dairy product manufacturing
0.60
Finance
0.60
Other farming
0.50
Sheep and beef cattle farming
0.45
Services to agriculture, hunting and trapping
0.43
Other horticulture
0.41
source: BERL, Butcher & Associates
Taranaki Dairy sector
% of sector inputs
A large portion of the inputs for the dairy sector in Taranaki is, not surprisingly, provided by
the dairy cattle farming industry, at 36 percent of all inputs.
A distant second is wholesale trade, followed by fertiliser manufacturing, which each provide
around 1.0 percent of inputs into the dairy sector. The top ten input industries account for 42
percent of all dairy sector inputs. This suggests that inputs come from a wide range of
industries.
However, a number of industries are reliant on the dairy sector for a significant proportion of
their activity. Table 4.8 presents the industries most reliant on the dairy sector in terms of
the portion of their total output contributed to the dairy sector.
Table 4.8 Taranaki industries reliant on dairy
Taranaki Dairy sector
Dairy cattle farming
96.69
Veterinary services
45.37
Mixed cropping
38.23
Other horticulture
35.17
Services to agriculture, hunting and trapping
30.96
Other farming
27.91
Plastic product manufacturing
24.58
Horse and dog racing
24.01
Fertiliser manufacturing
18.84
Other food manufacturing
18.25
Other fruit
14.97
Waste disposal, sewerage and drainage svs
14.19
Accounting services
11.43
Finance
11.03
Personal and other community services
10.80
source: BERL, Butcher & Associates
% of contributor
industry output
The importance of the dairy sector within the Taranaki region is evident from the fact that it
accounts for more than ten percent of production by at least 15 industries in the region.
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These include primary-based industries such as dairy cattle farming and veterinary services,
and a range of general business-related industries.
Almost all of the dairy cattle farming industry’s production feeds into the dairy sector in
Taranaki. Almost half of Taranaki veterinary services are inputs into the dairy sector. The
dairy sector accounts for more than one-third of mixed cropping and other horticulture
production in the region. It also absorbs more than one-quarter of outputs from services to
agriculture, hunting and trapping, and other farming.
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4.4
Meat processing sector
The meat processing sector in Taranaki is made up of three industries at the 114 industry
level. The industries are meat processing, poultry processing; and bacon, ham and
smallgood manufacturing.
Table 4.9 shows the contribution of the meat processing sector to the Taranaki economy and
to the national Meat processing sector in 2006.
Table 4.9 Taranaki meat processing sector
Taranaki Meat processing sector
Total
% of regional
% of national meat
processing
Employment (FTEs)
1,959
4.33
7.48
GDP ($mn)
169
3.87
7.78
Business units
15
0.12
4.89
source: BERL regional database, Statistics NZ
The sector employed 1,960 FTEs in 2006, producing $169 million in GDP through 15
businesses. The importance of the sector to the region is highlighted in its 4.3 percent
contribution to all regional employment, and the fact that it produces 3.9 percent of regional
GDP. The sector accounts for just 0.12 percent of regional businesses. This indicates that
at a local level, the sector is dominated by a few large businesses.
Taranaki is also home to a large proportion of the national meat processing sector, with 7.5
percent of all employment in the sector and 7.8 percent of national meat processing GDP.
The region has 4.9 percent of all meat processing businesses in New Zealand.
As with the dairy sector, projecting changes in the meat processing sector is difficult due to
the fact that the sector is dominated by a few large businesses. A decision to expand or
reduce operations by any one of the major players can have a large impact on the sector in
the region. It is important to keep this in mind when projecting likely changes.
Based on recent performance, employment in meat processing is expected to grow modestly
over the next 20 years. Coupled with slight rises in labour productivity, this should result in
GDP growth of a little over 3.0 percent per annum over the next 20 years. More detail on
likely rises in employment and GDP are introduced in section 5.
The employment multiplier for the meat processing sector is 2.31. In other words, for every
FTE created in the sector, a further 1.31 are created elsewhere in the region. This implies
that a number of industries are dependent on the meat processing sector to absorb their
outputs, as shown later in this section.
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Table 4.10 presents the make-up of the Taranaki meat processing sector’s inputs and
outputs. It also shows the sector’s contribution to each category of regional inputs and
outputs.
Table 4.10 Taranaki meat processing sector total inputs and outputs
Taranaki Meat processing sector
% of sector
% of regional
Inputs
Intermediate inputs
37.30
2.38
Imports
38.00
4.64
Wages and other household income
13.75
4.20
Other inputs
10.95
1.89
Outputs
Intermediate outputs
6.41
0.41
Exports
87.24
9.11
Household and government consumption
6.54
1.51
Other outputs
-0.19
-0.11
source: BERL, Butcher & Associates
The sector imports 38 percent of all inputs, accounting for 4.6 percent of all Taranaki
imports. Almost as much of its inputs (37 percent) are provided by industries in the region.
Nearly 14 percent of inputs into the meat processing sector are through wages and other
household income, which equates to 4.2 percent of regional wages and other household
income.
The importance of the sector to the region is clear from the fact that it exports 87 percent of
its outputs, representing 9.1 percent of Taranaki exports. Very little of the sector’s outputs
(6.4 percent) feeds into industries in the region.
Table 4.11 presents the top ten industries by contribution to meat processing sector inputs in
Taranaki.
Table 4.11 Taranaki meat processing major input industries
Sheep and beef cattle farming
15.74
Other farming
3.53
Road freight transport
2.86
Dairy cattle farming
2.86
Meat processing
2.66
Services to agriculture, hunting and trapping
1.48
Mixed cropping
1.22
Electricity generation
1.15
Wholesale trade
1.05
Personal and other community services
0.65
source: BERL, Butcher & Associates
Taranaki Meat processing sector
% of sector inputs
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Not surprisingly, the sheep and beef cattle farming industry provides the biggest portion of
inputs to the meat processing sector, at almost 16 percent. A variety of other primary-related
industries along with road freight transport fill the top five places.
The top ten industries together provide 33 percent of meat processing sector inputs.
Table 4.12 presents the industries most reliant on the meat processing sector in terms of the
portion of their total output contributed to the meat processing sector in Taranaki.
Table 4.12 Taranaki industries reliant on meat processing
Taranaki Meat processing sector
Sheep and beef cattle farming
80.39
Other farming
54.27
Mixed cropping
38.37
Services to agriculture, hunting and trapping
29.59
Horse and dog racing
24.30
Road freight transport
14.79
Water supply
14.18
Plastic product manufacturing
9.28
Other fruit
9.05
Other horticulture
7.38
source: BERL, Butcher & Associates
% of contributor
industry output
More than four-fifths of the Sheep and beef cattle farming industry feeds into the meat
processing sector. More than half of other farming outputs are absorbed by meat
processing, along with 38 percent of mixed cropping. Services to agriculture, hunting and
trapping; horse and dog racing; road freight transport; and water supply each contribute at
least 14 percent of their outputs to meat processing.
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4.5 Engineering
sector
The engineering sector consists of nine industries at the 114 industry level. These industries
can be split into two broad groups: metal product manufacturing; and machinery and
equipment manufacturing.
Table 4.13 shows the contribution of the engineering sector to the Taranaki economy and to
the national engineering sector in 2006.
Table 4.13 Taranaki engineering sector
Taranaki Engineering sector
Total
% of regional
% of national
engineering
Employment (FTEs)
2,753
6.09
3.58
GDP ($mn)
240
5.48
3.75
Business units
282
2.20
2.94
source: BERL regional database, Statistics NZ
The sector employed 2,750 FTEs in 2006, or 6.1 percent of all regional employment.
Engineering in Taranaki produced $240 million in GDP (5.5 percent of the regional figure)
through 282 businesses (2.2 percent of the region’s businesses).
Seen in a national light, Taranaki provided 3.6 percent of all engineering employment
through 2.9 percent of engineering businesses. It contributed 3.8 percent of national
engineering GDP.
Engineering is expected to see strong employment growth over the next 20 years. Coupled
with modest labour productivity growth, the sector’s contribution to GDP should grow solidly
out to 2026. More detail on likely rises in employment and GDP are introduced in Section 6.
The engineering sector in Taranaki has an employment multiplier of 1.62. For every new
FTE created in the industry, a further 0.62 FTEs are created within the region.
Table 4.14 presents the make-up of the Taranaki engineering sector’s inputs and outputs. It
also shows the sector’s contribution to each category of regional inputs and outputs.
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Table 4.14 Taranaki engineering sector total inputs and outputs
Taranaki Engineering sector
% of sector
% of regional
Inputs
Intermediate inputs
26.07
1.34
Imports
40.25
3.94
Wages and other household income
25.33
6.21
Other inputs
8.35
1.56
Outputs
Intermediate outputs
16.01
0.82
Exports
67.85
5.68
Household and government consumption
3.83
0.71
Other outputs
12.31
5.80
source: BERL, Butcher & Associates
The engineering sector imports 40 percent of its inputs from outside the region, accounting
for 3.9 percent of all Taranaki imports. More than 25 percent of the engineering sector’s
inputs are in the form of wages and other household income, which equates to 6.2 percent of
all wages and other household income in Taranaki. Industries within the region provide 26
percent of the inputs required by the engineering sector.
Almost 68 percent of the engineering sector’s outputs are exported from Taranaki, which
equates to 5.7 percent of all exports from the region. Around 16 percent of the sector’s
outputs are absorbed by other industries in the region.
Table 4.15 presents the top-ten industries by contribution to the engineering sector inputs in
Taranaki.
Table 4.15 Taranaki engineering major input industries
Structural, sheet and fabricated metal product mfg
6.60
Wholesale trade
5.77
Electricity generation
2.96
Road freight transport
1.20
Property ownership and mgt and real estate
0.65
Technical services
0.65
Ancillary services to construction
0.58
Business administrative and mgnt services
0.57
Retail trade
0.53
Basic metal manufacturing
0.51
source: BERL, Butcher & Associates
% of sector inputs
Taranaki Engineering sector
The engineering sector draws 6.6 percent of its inputs from the structural, sheet and
fabricated metal product manufacturing industry. Wholesale trade supplies the next most, at
5.8 percent. Electricity generation supplies 3.0 percent of inputs, while road freight transport
supplies 1.2 percent.
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The ten industries which provide the most inputs to the Engineering sector together provide
20 percent of these inputs.
Table 4.16 presents the industries most reliant on the engineering sector in terms of the
portion of their total output contributed to the engineering sector in Taranaki.
Table 4.16 Taranaki industries reliant on engineering
Taranaki Engineering sector
Glass and glass product and ceramic mfg
24.34
Structural, sheet and fabricated metal product mfg
17.98
Wholesale trade
7.23
Plastic product manufacturing
6.21
Other mining and quarrying
6.18
Rubber manufacturing
6.16
Services to finance and insurance
5.19
Road freight transport
4.99
Employment, security and investigative services
4.96
Business administrative and mgnt services
4.00
source: BERL, Butcher & Associates
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