Forestry Resources

New Zealand Country Overview

Introduction

New Zealand - Aotearoa in the native Māori language - is a country in the Southern Pacific consisting of two main islands and a number of small offshore islets. With a population of just under 3.6 million people and a total land area of 27.1 million hectares, the country is characterised by vast unpopulated areas mainly used for the agricultural and forestry industries.

New Zealand is a member of the Commonwealth of States and is politically run as parliamentary democracy under a Mixed Member Proportional Representation government. Its capital is Wellington, located on the southernmost tip of the North Island. Further to the north lies New Zealand's largest city, Auckland, with a population of one million. The largest city in the South Island is Christchurch.

The Economy

New Zealand emerged from the Second World War with its industrial and agricultural capacities intact, in a world facing major shortfalls in agricultural and consumer goods. The opportunities for a country with significant productive potential were such that in the early 1950's New Zealand's Gross National Product (GNP) per capita was ranked second only to Switzerland. However, New Zealand's failure to capitalise on this wealth by developing industrial capacity, and its continued reliance on primary commodity products as its main source of income, saw it enter the 1980's ranked beyond 30^th in a list of countries' per capita GNP's. By 1984 New Zealand was heavily indebted and facing a major currency crisis. A change of Government saw New Zealand embark upon a program of enormous reformation and restructuring, which embraced a market-oriented economic philosophy. A key tenet was that economic efficiency would be optimised if markets were allowed to develop and operate with a minimum of Government intervention. Key measures over the following ten years have included:

removal of producer and exporter subsidies
removal of incentive payments
elimination of import licensing systems and import quotas
heavy reductions in tariff protection
removal of most consumer subsidies
moving the exchange rate mechanism from a fixed to a floating system
orientation of Government services along "user-pays" lines
restructuring the Government sector to improve accountability, reduce costs and focus on priorities
re-orienting certain Government-owned industries to work as closely as possible to a private sector model
sale of some Government-owned industries to the private sector
assigning the Central Bank the role to control inflationary distortion in the economy
improving labour market flexibility substantively through the dissolution of organised labour

It was not until 1993 that the first real evidence of an economic recovery began to appear, but that appearance was both strong and robust. Real GDP growth accelerated to 6.2 percent in the year to June 1995. Unemployment began to track rapidly downward from 9.4 percent in March 1994 to 6.2 percent by the end of 1996. Meanwhile inflation had stabilised at around 2 percent, compared with 20 percent in the mid-1980's. More recently the New Zealand dollar also gained in strength against the currencies of most of its major trading partners. The present New Zealand Government's economic vision and strategy for the coming 15 years are outlined in a series of publications titled Path to 2010, Towards 2010, and New Opportunities. The future for the New Zealand economy is promising. The economic reforms of the past decade have created a strong foundation for sustainable economic growth.

The Forestry Sector

farm forestry The forestry sector plays an increasingly important role in New Zealand's economy. It is almost entirely based on a planted forest estate of predominantly Pinus radiata. Forests cover 8.0 million hectares, or 29 percent, of New Zealand's land area. Of this, 6.4 million hectares are indigenous and 1.6 million hectares are planted forests.

Forestry's contribution to the national GDP has increased, from 3 percent in 1990 to 5.3 percent in 1996. In terms of export contribution, forestry ranks as the third largest contributor behind beef and wool. In the year ended 30 June 1998:

15.2 million cubic metres of wood were harvested from these forests
11.0 million cubic metres were processed on-shore by New Zealand's industry mix of four pulp and paper companies, five panelboard companies, more than 400 sawmillers and 80 remanufacturers
the roundwood equivalent of 9.7 million cubic metres was exported, in raw and processed form, earning New Zealand $2.2 billion
forestry directly provided jobs for more than 25,500 people
forestry contributed to 5.3 percent of New Zealand's national income

Click here for further information on New Zealand's forest resource.

The Forestry Future

In global terms New Zealand is a relatively small player, accounting for 1.0 percent of the world's total supply of wood for industrial purposes. However, the potential for forestry within New Zealand is huge. Based on the existing planted forest estate, New Zealand's available wood supply is forecast to increase from 16.4 million cubic metres in the year ended 31 March 1998 to almost 30 million cubic metres by 2010, an increase of around 80 percent. Looking forward to 2010, it could:

cover 2.5 million hectares, or 9 percent, of New Zealand's total land area
account for 1.9 percent of the world's industrial roundwood (based on current total world production)
have invested up to $6.5 billion in new wood processing facilities (the investment comprising a mix of sawmills, solidwood remanufacturing plants, and either panelboard mills or pulp and paper plants)
have added $4.9 billion to current export earnings, ranking forestry as New Zealand's number one export earner
provide jobs for an additional 35 000 people
contribute more than 10 percent to New Zealand's national income

The key to unlocking New Zealand forestry's enormous economic potential rests with sector investment in:

the health and quality of New Zealand's forests
value creation through further processing
market development
people and their skills
process innovation and product development
a private sector and government partnership approach to dealing with common forestry industry issues

Detailed statistics on New Zealand's forest resource can be found on the Statistics page.

Contact for Enquiries

Senior Analyst
Ministry of Agriculture and Forestry
PO Box 1340
Rotorua
NEW ZEALAND

Phone: +64 7 921 3403
Fax: +64 7 921 3402

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