New Zealand is a small, mostly mountainous island nation located in the southwestern Pacific Ocean. It has a population of around 5 million people and its GDP per capita is one of the highest in the world, at US$ 43,000. The New Zealand economy is highly developed and open, with a focus on international trade and services. The main industries are agriculture, manufacturing, energy production and services. Agriculture plays an important role in the New Zealand economy and accounts for around 7% of GDP. It is also one of the top exporters of agricultural products in the world due to its highly advanced agricultural technology. The main crops grown are dairy (milk, butter), wool, meat (lamb and beef), fruit (apples) and vegetables (potatoes).
According to cheeroutdoor, the manufacturing sector accounts for around 15% of total GDP with food processing being its largest component followed by machinery production. Other industries include electronics production, clothing manufacturing and automotive production. The service sector accounts for nearly three-quarters of total GDP with financial services being its largest component followed by business services such as consulting and IT services. Tourism is also an important contributor to economic growth; it contributed US$ 12 billion to the economy in 2018 alone making it one of the top earners for foreign exchange earnings. In recent years, there has been an increasing focus on renewable energy sources such as geothermal power which now account for over 80% of electricity generation capacity in New Zealand.
Business has been strongly characterized by the fact that New Zealand is an isolated country with a small domestic market. The economy has become very dependent on conditions on the world market. Up to the last decade, exports have been dominated by some agricultural commodities, and the market has been in Western Europe, primarily the United Kingdom. From the beginning of the 1970s, growth in the economy stagnated, unemployment rose and the debt burden increased.
Since the mid-1980s, a number of changes have been made to provide new growth power in the economy. The state’s role has been reduced, and business has been liberalized. Companies are now increasingly exposed to foreign competition, and the economy is more open than in the past half-century. Growing difficulties in getting agricultural products sold on the EU market have meant that New Zealand has expanded its trade with countries around the Pacific and in the Middle East. Since 1990, there have been no trade barriers between New Zealand and Australia. In recent years, the business sector has expanded and the industry is developing – now towards a higher degree of raw material processing and greater specialization.
More than half of New Zealand’s land is pasture and only 2 percent go. In agriculture, therefore, animal production dominates. In 1995, wool, meat and dairy products accounted for almost 3/4 of agricultural production and for about 40 percent of export value. Animals for meat production are kept throughout New Zealand, dairy cows mainly on the North Island and merino sheep on the south island slopes.
The arable farm is concentrated to the Canterbury plain on the south coast of the South Island with the cultivation of wheat, fodder seed, fodder root fruits, potatoes and legumes. Furthermore, New Zealand produces apples, pears and kiwi for export, and as the country’s wines become internationally known, the area of vineyards increases. Agriculture is large-scale, highly mechanized and highly scientifically grounded.
- Paulsourcing: Top 10 tips for doing business in New Zealand, covering country profile and market entry requirement.
Of the acreage, 28 percent is wooded. The original forest is increasingly protected in national parks and the like and instead the implanted, fast-growing species of pine (Pinus radiata) has become of great economic importance. A significant part of the timber goes to the domestic forest industry, which has expanded greatly.
Along the long coast there are many commercially valuable fish species, and frozen fish is an important export commodity. Deep-sea fishing with trawl was developed until 1983, when it was limited to a few species, including tuna. The total catch nevertheless increased from 215,000 tonnes in 1980 to 542 100 tonnes in 2012. During the 1980s fish farming started in New Zealand, which has led to increased exports of seafood as well as eel, the only domestic freshwater fish of importance.
Minerals and energy
On the west coast of the North Island, iron sand is used, which is used in the domestic steel industry, and in addition New Zealand produces small amounts of gold. On the South Island, coal is mined, which is the raw material in the country’s approximately ten thermal power plants. Coal resources are considerable but mining is less profitable.
The mountainous and rainy New Zealand has great hydropower potential; about 2/3 of the electrical energy comes from hydropower plants. In the area of Lake Taupo on the North Island, geothermal energy is extracted, which accounts for a few percent of the electricity demand. Natural gas deposits have become increasingly important. Gas is extracted partly in the Maui field between the North and South Island and partly on the North Island. It is used, among other things, to produce synthetic gasoline. Oil is also extracted in several places – on a limited but increasing scale. With a successful energy policy, New Zealand has reduced its dependence on imported oil.
Industrialization only started after the Second World War. More than 2/3 of all companies are located on the North Island, with the center in the Auckland region. Most important is the food industry with slaughterhouses, freezers, dairies, dry milk factories and canning factories. The country’s largest companies include forest industries, which produce sawn timber and pulp, mainly for export, as well as New Zealand Steel Ltd with steel mills south of Auckland and aluminum plants in the southern South Island. Other important industries are hardware and metal products, chemical industry and textile manufacturing (the latter two are aimed at the domestic market). Border protection has been reduced for industry, which is now subject to increased international competition.
In exports, the largest commodity group is still products from the livestock and forest industries. With regard to imports, a gradual shift has taken place, which reflects the development of the domestic industry. Mineral and chemical raw materials increase their share of import costs, while transport means as well as machinery and other workshop products decrease. New Zealand’s most important trading partners are China, Australia and the United States.
- COUNTRYAAH: Find major trading partners of New Zealand, including major exports and major imports with latest trade value and market share as well as growth rate.
Tourism and gastronomy
The country was visited in 2012 by 2.5 million foreign visitors. Most visitors come from Australia, Japan, the United States and the United Kingdom. The development was slowed down for a long time by the great distances to other countries, but the tourist flow has increased sharply during the 2000s.
Visitors are attracted mainly by the peculiar nature and Maori culture. One of the most visited tourist destinations outside the major cities of Auckland, Wellington and Christchurch is Rotorua with surrounding volcanic area on the North Island. There are, among other things, hot springs and spraying geysers. Rotorua is also an old Maori center with a craft school and a reconstructed pre-European village as well as other memories from the long history of Maori in the area.
Note: the capital city of New Zealand is Wellington with a population of 398,000 residents (2015). Other major cities include Auckland 1.5 million (with suburbs), Christchurch with a population of 382,000, Hamilton with a population of 224,000 (2015).
Abbreviated as ZK by abbreviationfinder.org, New Zealand’s different plant and bird life attracts numerous visitors, including to the country’s national parks and protected areas. On the North Island is the Egmont National Park on the west coast, which is also a popular skiing area in the winter. Otherwise, skiing has its center on the South Island around Queenstown, which is a popular tourist destination both winter and summer. The magnificent alpine scenery can be experienced both by steamboat ride on the 70 km long Wakatipus lake and through hikes on the many routes in the region.
Further west is the Fiordland area, a difficult to access coastal landscape with deep fjords. The only one that can be reached by road is Milford Sound, which with its 1,700 meter high cliffs is one of the most impressive.
The filming of JRR Tolkien’s trilogy “The Lord of the Rings” (2001–03) took place largely in New Zealand. The success of the films around the world led to an increased tourist flow to the country’s scenic areas.
Dairy products and sheep or lamb dominate, together with fresh fruit and fish, New Zealand cuisine. The cooking is characterized by the old British tradition, but the Maoris also had a certain influence. Roast lamb, large steaks, deep-fried potatoes and deep-fried fish are standard menus, but pork with tamarillos (pork with tree tomatoes) and stews combining deer and fruit are examples of processed dishes.
The Maori influence is evident mainly in fish and seafood dishes: marinated raw fish and mussels such as paua pipis and toheroa are delicacies, often served with kumara (sweet potato) or rauriki (a thistle species reminiscent of spinach).
Both meat and fish traditionally prepare the Maori in a hangi, an earthen oven in which the raw material, wrapped in leaves, is laid on hot stones, covered with tea bushwood and then allowed to cook steam. Otherwise you will notice oysters and lobster as well as grouper, eel and trout.