Challenges and opportunities

    The recession is beginning to bite in Gisborne, with sporadic job losses - especially in the construction sector - but key employers believe things won't get as bad as they were in the late '80s, and a leading economist says this region will be buffered from the worst of the worldwide downturn.

    "We used to have recessions with monotonous regularity," senior BERL economist Dr Ganesh Nana told a job summit in Gisborne on Friday.

    "The scary thing about this one is that it is on the back of lost memory - we have had it good for so long that we have forgotten what it's like."

    Things were not as bad as they might seem. Commentators were aghast when the unemployment level hit a five-year high of 4.3 percent. But he could remember in the late '80s when it topped 12 percent.

    This time although jobless numbers had increased, so had the number working.

    This recession was largely our own fault, and was hitting hardest where property values, equity and associated credit had been most extreme, which in New Zealand was concentrated in Auckland, he said.

    Although the European, US, Japan and Korean markets were down, those in China and India were still growing. New Zealand needed only a tiny slice of those markets to stay above the growth line.

    In the Gisborne region there was nothing to suggest the sky was about to fall in.

    Building consent levels had been erratic but were showing signs of picking up. Likewise, visitor guest nights.

    This region was a premium food producer in a world in which demand for food was rising.

    It was time to remember the training and get back to basics.

    There were challenges and opportunities. It was crucial to keep investing in people, physical resources and systems.

    "If you run down the people and resources, it takes a long time to come back up to speed."

    East Coast MP and Education Minister Anne Tolley outlined the Government's approach to the downturn, and particularly its focus on tertiary training.

    Ministry of Agriculture and Forestry strategy development director James Palmer gave an outline of the agricultural situation centred on national and Hawke's Bay data, highlighting the need for local statistics not currently available.

    National data painted a gloomy picture for the forestry sector in particular, but information presented by Eastland Wood Council chief executive Trevor Helson showed things were humming along quite well for the local industry.

    Log prices had held firm over the past few months and market demand remained solid, especially in Asia.

    Shipping costs, which in the past two years peaked at over $US85 per JAS (about a cubic metre), had fallen to below $US25 per JAS.

    The exchange rate had fallen back from around 80c to the mid 50s, which also worked in the industry's favour.

    Members of the group had not laid off any permanent staff.

    Other primary products - with the exception of wine - were holding up well, apart from the effects of the drought, which had dampened supply, said Mr Palmer.

    Prices were softening for wine because of reduced demand. Even though wine exports were increasing, they were not keeping up with the rapid growth in the New Zealand industry, which planted another 3000 hectares of grapes last year.

    Wineries were restricting yields, with some grapes not being harvested.

    Gisborne Wine Growers spokeswoman Prue Younger said one thing in this region's favour was that it had a diverse range of varieties.

    Having a share of only 0.3 percent of the world market, what happened overseas could have a dramatic effect.

    Tourism here was still showing signs of growth, particularly in the conference and events area.

    Tourism Eastland chief executive Graham Breckell pointed to the effects of Rhythm & Vines, which brought thousands of people to the region.

    Conferences organised by the city's new conference centres had brought 4000 delegates here over the past 12 months.

    The darkest spot on the local economy appeared to be in the construction sector, which spokesman Francis Yates said affected a huge variety of businesses - landscapers, hire companies, carpet shops, curtain makers etc.

    But there had to be a correction.

    "In the past five years we have had the best time we have ever had" and "things were going crazy".

    At one stage the industry was hiring anyone who could swing a hammer.

    Quite a few people had been laid off, including 35 apprentices.