What’s in this Chapter?

• Economic growth
• Employment
• Research and development
• Local businesses
• Retail sales
• Non-residential building consents
• Tourism
• Skilled migrants

For full data and details, graphs etc, refer to the chapter pdf »

Key Results - Economic Development

• The 12 cities account for nearly two thirds of all economic activity in New Zealand and the share gradually increased between 2001 and 2006.
• Estimated Gross Domestic Product (GDP) in the 12 cities grew by 4.3% per year on average over the five years to March 2006.
• Estimated GDP per capita in the 12 cities has grown by 3.5% per year.
• Labour productivity increased in eight of the 12 cities but declined at the total New Zealand level.
• Over the three years to December 2006, the number of filled jobs increased in the 12 cities by 11.7%.
• The Personal and Social Services industries account for the most jobs among the 12 cities, followed by the Distribution and Hospitality industries.
• Half of the 12 cities have a lower labour force participation rate on average than the rest of New Zealand.
• Unemployment has decreased to the point that most unemployment in the economy is likely to be short term, due to seasonal fluctuation and turnover.
• Employment in research and development has just kept pace with growth in the overall job market. The overall growth rate of businesses among the 12 cities, from 2002 to 2006, was lower than the rest of New Zealand with the exception of Tauranga and Rodney.
• Auckland, Manukau and Christchurch have consistently recorded the highest numbers of residential building consents. The rest of the 12 cities have recorded a sharp decline in the number of new residential buildings from 2003 to 2006.
• The value of non-residential building consents also grew between 2003 and 2004 in the 12 cities then tailed off, except in Christchurch where the value of consents increased by 76.9% from 2005 to 2006.
• The 12 cities account for over 39.0% of total guest nights purchased at commercial accommodation in New Zealand.
• For the period March 2004 to March 2007 the number of guest nights purchased in the 12 cities grew by 7.6%, which was similar to the growth for New Zealand as a whole.
• Of the 33,773 skilled migrants to New Zealand from 2004 to 2007, 25.0% elected to settle in the Auckland region while a further 26.5% of skilled migrants settled in the other regions where the 12 cities are situated. Nearly half elected to settle in regions elsewhere in New Zealand.

Economic Development

This is the second of two chapters that investigate economic wellbeing in the 12 cities. The previous chapter looked at changes to the standard of living for people and households, while this chapter looks at measures of the business sector and the broader economy.

Why this is Important

New Zealand has a mixed economy which operates on free market principles. It has sizable manufacturing and service sectors complementing a highly efficient agricultural sector, with exports of goods and services accounting for around one third of the country’s Gross Domestic Product. Indicators of economic development provide important information on whether or not there has been a sustainable increase in living standards.

Such a rise implies increased per capita income, better education and health of local residents. This in turn helps stimulate further opportunities for economic growth and development within a community or nation.

Key Points

The 12 cities account for nearly two thirds of all economic activity in New Zealand, a share which has gradually increased between 2001 and 2006. The economies of the 12 cities have grown, on average, by 4.3% per year over the five years to March 2006. The average growth rate of the rest of New Zealand was 3.5% per year over the same period.

There has been a growth in the number of businesses nationally. Although the number of economically viable business enterprises in the 12 cities grew by 23.6% between 2002 and 2006, this was lower than the growth rate in the rest of New Zealand.

Along with business growth, the total number of jobs has also increased and rates of unemployment have fallen.In the past five years there have been over 290,000 additional jobs created in New Zealand. Nearly two thirds of these jobs were created in the 12 cities.

These new jobs have contributed to raising the standard of living for many. The challenge of increasing productivity must be addressed, however, if New Zealand is to achieve sustainable economic development in the longer term.

Growth in retail expenditure reflects the health of the local economy. In the year ended March 2006, the 12 cities accounted for $36.8 billion (60.0%) of New Zealand’s total of $61.3 billion in retail expenditure.

Low unemployment and a growing economy have increased the demand for skilled workers, some of which is met by encouraging immigration. A quarter of skilled migrants coming to New Zealand intend to settle in the Auckland region and a further quarter intend to settle in other urban regions.

Economic Growth

• The 12 cities account for nearly two thirds of all economic activity in New Zealand, a share which has gradually increased between 2001 and 2006.
• Estimated Gross Domestic Product in the 12 cities grew by 4.3% per year and Gross Domestic Product per capita by 3.5% per year from 2001 to 2006.
• Labour productivity increased in eight of the 12 cities and for the 12 cities as a whole, but declined at the total New Zealand level over the same period.

Employment

• The number of jobs in the 12 cities increased by more than 190,000 over the five years to February 2006.
• Unemployment has decreased to the point that much of it is likely to be due to seasonal fluctuation and turnover of the remaining unemployed.

Research and Development

• Employment in research and development has only just kept pace with growth in the overall job market.

Local Businesses

• The overall growth rate of businesses among the 12 cities, from 2002 to 2006, was lower than the rest of New Zealand with the exception of Tauranga and Rodney.

Retail Sales

• Retail spending has increased in all 12 cities over the period 2003 to 2006.
• The highest amount and greatest proportion of national retail spending occurs in Auckland.

Non-residential building consents

• The 12 cities account for nearly 60.0% of the value of all non-residential consents.

Tourism

• The 12 cities account for almost two fifths of total guest nights purchased at commercial accommodation in New Zealand.
• The number of guest nights purchased grew in the 12 cities in the period 2004 to 2007 and at a similar rate of growth for New Zealand as a whole.

Skilled Migrants

• A quarter of the skilled migrants to New Zealand elect to settle in the Auckland region.
• A further quarter settled in the other regions where the 12 cities are situated.