Tourism mecca Queenstown Lakes District has been one of the country's top performing economic regions for 2009 - and during the preceding decade - notching up "blistering growth", while the separate Central Otago District "weathered out" the economic downturn well.
The two neighbouring areas have stood up well against the recession, but for differing reasons, Berl chief economist Dr Ganesh Nana, said in a regional and sub-regional report on the province's 2009 economic profile.
"Over the decade since 1999, the Queenstown Lakes District has enjoyed blistering growth in population, GDP [gross domestic product], employment and business numbers," Dr Nana said in the report.
While Queenstown has doubled its employment growth between 1999 and 2009, with a construction and tourism boom, Central Otago relied on its primary sector, with the wine industry and related services being the substantial drivers of its economy, Dr Nana said.
"The Central Otago District, on the whole, weathered out the global economic slowdown well. It experienced strong output, employment and population growth during 2009," he said.
Queenstown provides one-sixth of Otago's regional employment and GDP and has a far greater share of recreation services, retail and distribution sectors, further underpinned by the construction boom in recent years.
Queenstown Chamber of Commerce president Alistair Porter said a major project for the chamber this year was to establish an economic development unit [EDU] in Queenstown, a proposal now backed up by findings in the Berl report, to independently underpin applications for bank funding, following the demise of finance-company funding.
Queenstown's major problem at present is financing development, following problems with developments such as Kawarau Falls, Five Mile and others, which Mr Porter described as "misconceived, even in boom-times".
"Finance company money; mezzanine [high interest] money, is not suited to long-term developments," he said.
While tourism underpins the economy, other services, albeit some related, such as the film industry, education, sport and recreation needed further development, all of which, in turn, should realise future growth would come from places such as China, India and Hong Kong.
"We tend to be counter-cyclical here in Queenstown; on recession and what's happening elsewhere around New Zealand," he said.
As local businesses grew, they were struggling to find local financing.
Applications were subsequently referred to head offices elsewhere in the country, and were being declined.
"They're saying `we've already spent millions there' . . . having lent on developments which were beyond [financial] reality in the past'," Mr Porter said of the headline-grabbing exposure, and in some cases failures, associated with Queenstown apartment and hotel developments.
"Key" for the area during the reminder of the 2010 was the potential for Asian tourism growth and establishment of an EDU which would assist rebuilding banks' confidence in the Queenstown area.
An EDU would provide "independent, verifiable data" with applications, Mr Porter said.
Dr Nana noted Queenstown's resident population growth of 5.4% for the decade to 2009 outstripped Otago and New Zealand's respective 1% and 1.2% growth while its business unit growth at 9.7% was more than triple New Zealand's 3% and more than double Otago's 3.7%.
However, Dr Nana said, despite the rapid pace of development, labour productivity gains were on par with national trends and although business numbers were growing, the size of the businesses declined over the decade by 2.4%.
Otago and New Zealand both reflected a decline of less than 1%.
The separate Cental Otago district experienced strong output, employment and population growth in 2009, with employment in direct wine-related industries climbing to almost 6% of the area's employment for 2009.
"Six of the top 10 fastest growing industries in 2009, by employment, were service industries,' Dr Nana said.
Central Otago's output, employment and population growth in 2009 exceeded the overall Otago region and was "defying the national recession", Dr Nana said "The district's population continued to grow faster than the national rate," he said.
Jobs in grape growing were up almost 20% in 2009, about 60 full-time equivalent jobs, plus more than 50 jobs in wine manufacturing.
Hectares planted in grapes had almost tripled during the past eight years, from 534ha in 2002 to 1540ha (forecast) for 2009.
Central Otago's tourism sector outperformed all other areas in New Zealand, apart from occupancy rates, but suffered like the rest of the country with downturns in guest nights and occupancy, Dr Nana said.
It had "above average" GDP and GDP per capita was ahead of the national average.
While productivity dropped by 0.5% for 2009, the number of business units were "strongly" up 1.7% for the year or 3.8% for the decade, Dr Nana said.
