‘Not unexpected’: Timaru economy takes a hit after meatworks closure

Tuesday, 3 June 2025

Venture Timaru chief executive Nigel Davenport says the latest economic data for the Timaru District is not unexpected.

Unemployment figures were up, economic activity down, and there was a “sharp pullback” in construction and manufacturing across the Timaru District in the year to March, according to provisional data released by Infometrics.

But it wasn’t all bad news, with improving meat and dairy prices helping to keep Timaru, which experienced an economic contraction of 0.8% down to $3969 million, ahead of the national economic decline of 1.1%.

The closure of Alliance Group’s Smithfield plant was cited as having weighed on the district’s manufacturing performance and drove unemployment figures up.

In the quarter to March, employment of Timaru residents fell 2.4%pa, “almost entirely driven by the loss of manufacturing jobs associated with Alliance Smithfield closing”, the report said.

Commenting on the March 2025 quarterly economic report, Venture Timaru chief executive Nigel Davenport said the latest data was “not unexpected”.

Hundreds of Smithfield employees gather for an urgent meeting at the Caroline Bay Hall in Timaru in September about plans to close the plant.

“The closure of Alliance’s Smithfield plant is having an impact in the latest economic figures, but it’s not unexpected.

“We’re seeing a drop in our GDP, a rise in job seekers and it looks as though consumer spending has taken a bit of a hit too,” Davenport said.

The number of jobseekers increased by 27%pa in the March quarter, also likely to have been driven by ex-Smithfield workers. But as of March, the district’s unemployment rate of 4.4% was below the national average of 5.4%.

Consumer spending had been tracking well, up 1% in the year to March 2025, compared to a 1.4% fall nationally.

However, consumer confidence appeared to have taken a knock after the Smithfield closure, with Timaru spending down 2%pa in the March quarter.

Boxing Day shoppers out making the most of sales on Stafford St in December.

The amount spent in the district by tourists was also back by 1.5%, and was reflective of headwinds for domestic and international tourism nationally. Guest nights in Timaru fell 5.5% in the year to March 2025, dragged down by falling domestic visitation, and weak international growth, the report said.

According to the Infometrics 2024 Regional Economic Profile, tourism supported 4.8% of Timaru’s jobs.

Venture Timaru’s Nigel Davenport, centre, with Timaru mayor, Nigel Bowen, second from left, and NZ Meat Workers Union southern region senior organiser Bill Watt, second from right, in September as Smithfield workers are informed of the plan to close the meatworks.

There were modest gains in agriculture, education, and health, and a decline in accommodation and food services, which reflected a stalling tourism recovery nationally.

Despite the challenges, Davenport remained confident, and pointed to an additional $139m expected to be pumped into the local economy by the increased dairy payout.

“… we are a resilient community and our agricultural backbone is still having a major positive impact on the economy, as lamb prices are up 10%, beef prices up 15% and dairy farmers are expecting a record high payout forecast at $584m this season,” he said.

In the 2023/24 season, the total dairy payout for the Timaru District was estimated to be about $445m.

“These good returns are likely to lead to spending within our local community at grass roots level, and coupled with the Government’s announced tax incentive for the agricultural sector for purchases of farm equipment, tools and machinery, it’s likely to bring about another boost in spending.”

The Infometrics report shows house values in the Timaru District fell by 1.7% in the March quarter.

Providing some brighter economic news for the district, non-residential building consents topped $100m in the year to March, offsetting softness in residential consents, which were virtually unchanged over the year.

Davenport said that “big jump” in consents would mean a “good flow on effect for a number of construction related businesses”.

Timaru’s house values also fell back 1.7%pa in the March 2025 quarter, which was broadly in line with the national fall of 2.1%pa. The average value was now sitting at $511,082 compared with $661,218 in other provincial areas.

Sales volumes also fell 1.8% as the number of listings increased by 5.5%, suggesting that houses were selling slowly in the area, the report said.