Bumpy but optimism remains for Hawke’s Bay economy

Damon Harvey – damon@theprofit.co.nz

It would be an understatement to say that 2020-2022 have been challenging years for businesses.

In June 2022 at a business breakfast hosted by Hastings District Council guest speaker economist Brad Olsen told local business leaders that Hawke’s Bay was the strongest performing economy in the country during the two COVID19 disrupted years.

But by September 2022, (the most recent Infometrics report) showed that economic activity in Hawke’s Bay was slowing with growth of 1.5 percent regionally.

Towards the end of 2022 it was hard to escape the ongoing media and political commentary around the rise in inflation adjustments, talks of a looming recession and the cost of living crisis. As all of this plays out this year, we also have general elections and the performance of the economy is expected to have a significant impact on how people vote.

Hawke’s Bay has a diverse economy. It is based on food production across horticulture, viticulture and agriculture products.

We also have a nimble and growing technology sector with businesses such as Fingermark, ReLeased and Ask Your Team increasing their talent as they secure more global customers for their products.

The construction and infrastructure sectors, despite labour and building material shortages, has had a busy few years but what’s in the pipeline?

Central Government and local government projects have added plenty of sugar candy to the sector with projects such as the $32m Regional Aquatic Centre, the new indoor court facility in Taradale. Other major build projects include stage 1 of Kaweka Hospital ($40m), $20+ million new terminal at HB Airport and the $130m new wharf at Napier Port.

Going forward there’s still some major construction projects such as stage 2 of Kaweka Hospital ($70m), a food hub in Hastings, the completion of the largest packhouse facility in the Southern Hemisphere by T&G, other apple processing facilities in Irongate and accommodation facilities for RSE workers.

Three Waters projects dominated most councils with Hastings District Council spending over $80m across several projects while Napier and Central Hawke’s Bay are also upgrading their drinking, waste and storm water services.

As we head into predicted a predicted recession, there will be a greater focus on the new regional economic development agency, which will be established in Hastings.

So what is the outlook for 2023?

The Profit has gone to business leaders and councils across the region to get their views on what will happen to their businesses, their cities and the overall Hawke’s Bay economy.