Story: Industrial sectors
Increasingly New Zealand’s primary producers of meat, wool, dairy, fish or logs sell their products to local secondary industries, which process goods before exporting them. New Zealand is famous as a tourist destination, but education exports also feature large in the tertiary sector of the economy – in 2008 they earned $2.4 billion.
Full story by Ganesh Nana
Main image: Processing milk in Awarua, Southland
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Primary industries – farming and forestry
Primary industries provide raw materials like wool, meat or coal. New Zealand’s primary industries are dominated by dairy, beef and sheep farming, but forestry, fisheries and horticulture are also important.
Although primary industries have high levels of ‘physical capital’ – money invested in land – they employ relatively few people: in 2008 they paid just $4.2 billion of the total $70 billion paid to people in wages.
In the early 2000s the primary sector invested more in imported machinery as less was made locally. Economists call money invested in things like equipment (or wages) ‘inputs’. In 2008 half of the inputs in primary industries were imported.
Primary industries used to sell their products directly overseas, but by 2009 most outputs were sold locally, to secondary industries. The relative amount New Zealand earns from exports from the primary sector has dropped.
Secondary industries – manufacturing
Secondary industries manufacture products from raw materials. New Zealand’s secondary industries are unusual because of the large number of businesses processing primary products like dairy, meat, fish, other foods, and wood and paper. These made up 30% of secondary industry in 2008.
Secondary industries export a large proportion of their products, and contribute the bulk of New Zealand’s exports. In 2008 they earned $10 billion from meat and dairy exports, $2.5 billion from wood pulp and paper, and total exports were more than $40 billion.
Steel and aluminium products earned over $8 billion in exports in 2008. These two industries invest a lot of money in land and equipment, and use large amounts of electricity.
The primary and secondary sectors made up 29% of the total value of goods and services produced each year (the gross domestic product or GDP) in 2008.
Tertiary industries – services
Tertiary industries provide services, which made up 71% of GDP in 2008. Finance, insurance and other business services made up about 15%, and property services were also 15%. Other services were transport, communications, retail, building, education and health.
Most of New Zealand’s total imports of $47.5 billion in 2008 were for the retail industry. Some industries, like the building industry, used locally made materials such as timber and concrete.
Service industries spent $50 billion of the total $70 billion that went on wages in 2008. They had an export income of $7.5 billion, mostly from tourism. Accommodation, transport and retail industries all earned tourist export dollars. Another source of export income was education, revenue from fees paid by foreign students studying in New Zealand and educational products marketed overseas.