Economic conditions have been challenging in Taranaki, and not just for forestry, but the downturn may be starting to ease for some.
This according to Te Puna Umanga Venture Taranaki’s latest Quarterly Economic Monitor for Taranaki, compiled by independent economic consultancy Infometrics.
Over the year to September 2025, the region’s GDP has provisionally fallen 2.3%, compared with a national decline of 0.5%. However, the most recent quarter recorded a smaller year-on-year drop in output (down 0.4%), the mildest contraction since late 2021, suggesting the sharpest phase of the downturn may be passing.
The unemployment rate has lifted to 4.3%, slightly up from 4.0% last year, but still sits below the national rate of 5.2%. Young people are particularly affected, with 16.4% of 15-24-year-olds in Taranaki not in employment, education or training, compared with 13.3% nationally.
Anne Probert, Director Strategic and Sector Partnerships at Te Puna Umanga Venture Taranaki, says the data reflects the pressure many households and employers are feeling.
"The latest report shows that tight economic conditions, combined with the contracted gas supply situation, are continuing to weigh on activity across several key sectors," she says. "Construction, metal manufacturing and some service industries are all under strain, and the job market is tougher than it has been for some time."
"At the same time, we are starting to see some stabilisation. Consumer spending in Taranaki has fallen only slightly compared to the national average, and there are clear bright spots in housing and the primary sector that are helping to buffer the region."
The rural economy remains a major source of resilience. The dairy sector is expected to receive another near record payout in the 2026 season potentially injecting around $1,828m into the local economy. Over the year to September 2025, prices for lamb were up 31% and beef up 29%. In contrast, forestry and logging are under pressure as wood prices hit their lowest levels in a decade.
The Taranaki housing market is in comparatively good shape. House sales are up nearly 15% over the year, listings continue to rise, and average values have increased to $587,000, still well below the national average of $867,000. Rents have increased only modestly, and housing affordability in the region remains better than the New Zealand average.
Meanwhile across the visitor sector, guest nights rose 2.3%, outpacing national growth (1.7%). Although tourism expenditure fell in the year to June 2025, the lift in guest nights signals that demand is still there, but individual visitors are spending less on average, a clear reflection of current economic pressures.
In line with the national trend of slowing population growth, Taranaki recorded zero net growth in the year to June 2025 - the first time in 20 years that the population has not grown.
Te Puna Umanga Venture Taranaki Chief Executive, Kelvin Wright, says this stall in population growth highlights the importance of a strong, diversified regional economy.
"A healthy economy underpins our ability to retain and attract talent and supports the rating base needed to fund the services and infrastructure our communities expect. If our population shrinks, the cost of running the region is shared across fewer households and businesses. These latest figures reinforce the need for Taranaki to stay adaptive, innovative and coordinated as a region to access new market opportunities."
Venture Taranaki commissions the Quarterly Economic Monitor specifically for Taranaki to provide an objective view of regional performance. The report tracks trends in GDP, employment, spending, housing, and social indicators, giving businesses, councils and communities a shared evidence base for decision-making.
