1.2 Purpose of this waste assessment - Waikato District Council

A.2.2Economic growthEconomic growth has traditionally been correlated with waste production. Higher levels of economic activityleads to greater production and consumption of goods and this in turn can lead to higher quantities of waste.A common measure of economic growth is Gross Domestic Product (GDP). With no historical waste data, itis not possible to demonstrate a correlation between waste volumes and GDP within the district.However analysis of data from other parts of New Zealand has been analysed in this way, and shows a strongcorrelation between waste and GDP.In recent time, GDP growth has fallen sharply and at the time of writing this report NZ had experienced sevenconsecutive quarters of negative economic growth. Economic forecasts vary with some predicting an extendedperiod of weak growth 18 before the economy recovers to previous historical levels.In terms of planning for waste facilities and services however it is important to ensure demand is met and so itis prudent to take a more optimistic view. Below are GDP forecasts to 2016 which indicate a return to growthof around 3 per cent per annum by 2010.Table 22: GDP and GDP growth to 20162010 2011 2012 2013 2014 2015 2016GDP ($m) 34,140 35,329 36,151 37,248 38,378 39,542 40,439GDP growth 3.42% 3.48% 2.33% 3.03% 3.03% 3.03% 2.27%Source: Goldman Sachs JB WereOn the basis of the correlation noted above, the trend in GDP would indicate a reduction in waste over thecoming year followed by a return to historical levels of waste growth.A.2.3Recycling marketsRecovery of materials from the waste stream for recycling and reuse is heavily dependent on the recoveredmaterials having an economic value. This particularly holds true for recovery of materials in the private sector.Markets for recycled commodities are influenced by prevailing economic conditions and most significantly bycommodity prices for the equivalent virgin materials.In the latter part of 2008, after the global economic crisis, international markets for recycled commodities fellsharply. Prices for aluminium cans dropped from $1000 a tonne to $100. Plastics, on average, fell from $280a tonne to $200, steel from $700 to $100 and copper from $8000 to $4000. Cardboard and paper pricesalso dropped 90 per cent. 19 Since this time demand and prices have recovered to a degree but not to previouslevels. While the fall appears dramatic, prices were falling from record highs and have in real terms simplyreturned to pre-boom prices. This is illustrated in Figure 5.18 http://www.nzherald.co.nz/economy/news/article.cfm?c_id=34&objectid=10580231&pnum=219 http://www.stuff.co.nz/4810576a13.html54