NZ - Forestry boom for East Coast economy

Forestry is delivering a massive economic benefit to the Gisborne region in New Zealand and, with an expected boom in log exports, by 2020 one in 10 people could earn a living from the sector, according to a new economic study.

Forestry is worth more than NZ$225 million a year in the East Coast region, overtaking sheep and beef farming, at NZ$206m the other key sector in the region, the report by Waikato University shows. Including the spill over effect into other activity around the region there was a “flow-on” value of NZ$383m from forestry.

Gisborne is already the third largest export producer of logs, worth about NZ$208m a year, behind Tauranga in top spot and Whangarei in second place. By 2020, the forestry sector will be worth NZ$328m, the report says, creating another 630 jobs, with the total wage and salary bill likely to rise by NZ$55m.

The report, commissioned by the Eastland Wood Council, shows there are more than 1600 fulltime jobs in the forestry sector in the region. The jobs in forestry are about the same as all the jobs in manufacturing, building, health and business services combined, the report shows. East Coast log exports are expected to grow 60 per cent, from about 2 million tonnes in the past year, to a potential harvest of 3.2 million tonnes by 2020. That was expected to add hundreds of jobs to the region, with flow-on effects into the port, transport and machinery services. It would also create a platform for the development of the wood processing sector to make high profit margin timber products.

Based on harvest projections, it has been suggested that the Gisborne-Tairawhiti region could easily sustain three or four wood processing mills geared for export production. There is just one large wood processing mill and other smaller mills operating in Gisborne. The one large mill processes 10-15 per cent of the region’s production.

Export log volumes and values have tripled since 2007, the report says. The forestry sector already has a NZ$94m salary bill, with an average salary of more than NZ$59,000 a year. “This underlines the fact that forestry is no longer a low paid/low skill occupation but emerging as one of the more sought after occupations because of the income levels but also the training and technology opportunities it creates,” Eastland Wood Council chairman Iain McInnes said. Experienced workers usually earned NZ$45,000 to $60,000 a year, while contractors could make up to NZ$80,000.