Manufacturing and processing

The Northland Dashboard

(Data source: Infometrics Regional Database)

Northland is not widely perceived as a region with a strong base in manufacturing, but in fact the sector is surprisingly large, contributing the most of any sector to Northland’s overall economic position and employing almost 10% of its workforce.

This is due to a number of reasons, the most significant of which is the location of New Zealand’s only petrol refinery at Marsden Point.  While the refinery accounts for only 5% of direct employment in manufacturing, it produces almost a third of the sector’s value to the region, and has encouraged the growth of the local engineering industry in and around Whangarei to service the plant’s day-to-day operational needs as well as its staged development. The refinery currently accounts for 40% of New Zealand’s total energy needs - notably producing 55% of New Zealand’s petrol demand, almost all its jet fuel, 80% of its diesel requirements, and 75-85% of the country’s bitumen for building roads.

The cement industry is another feature of the region, with the larger of the country’s now only two cement works operating near Whangarei and accounting for ~63% of the country’s production. The cement is distributed nationally by rail, road and coastal shipping and some quite large volumes are also exported.

The manufacturing sector also plays an important role in relation to the region’s primary industries turning product from the agriculture and forestry sectors into manufactured goods, producing farm inputs such as agricultural fertiliser and water tanks and servicing the engineering requirements of primary industry firms (farm and forestry machinery). Small, long established locally owned family firms, employing 10-20 employees is a feature of the manufacturing sector in the region, particularly in the engineering-, wood processing- and agriculture- related industries.  These three industries provide almost 75% of the jobs in the sector locally. Economic activity - and job growth - in all industries across the sector has slowed considerably over the last five years.

A particular feature of the sector in Northland is marine engineering.  This has expanded from a historical strength in boat-building into the building, repair and re-fitting of pleasure craft and super yachts, naval vessels and workboats such as fishing fleet vessels and barges. The associated industries  are clustered mostly around the Whangarei and Opua Harbours being often the first entry points, and what have become highly respected layover and provisioning spots, for ‘yachties’ sailing to New Zealand and the greater South Pacific.

GDP growth of the sector in the region bears little resemblance to the picture for manufacturing in the rest of the country.  If anything, it demonstrates that the sector is affected earlier and more significantly by the peaks and troughs that have impacted on manufacturing nationally.