Economic Report: Solid growth for region
Solid growth for region, but still room for improvement says economic report
The Auckland region has experienced solid economic growth over the past year, although it has underperformed the national average, according to a report released yesterday by the Auckland Regional and Auckland City councils.
The Business and Economy 2004 report provides an economic assessment of the Auckland region, and looks at current economic trends, prospects and challenges facing the region. The report indicates that the region has experienced 2.7% growth over the past year, and there have been some stand-out areas that have performed above the average.
The 2004 report was launched yesterday evening (28 April) at a function at the Auckland Regional Council, which included guest speaker, Deputy Prime Minister Hon Dr Michael Cullen. Guests included representatives from the region’s business community, and local government.
Dr Cullen described the Auckland region as “an essential link in the value chain”, and that a sustained effort over an extended time is what is needed to address some of the problems facing the region such as skill shortages, underinvestment in infrastructure, fragmentation of planning and investment at a local authority level, and lack of investment by businesses in the level of capital per worker.
Dr Cullen said that while there is no quick fix for these problems, “it is unavoidably a partnership between the business community, local authorities and central government that will be the key to addressing some of the regions problems.”
ARC Chair, Cr Gwen Bull, who opened the launch, agreed with Dr Cullen’s comments, and said that the ongoing development and implementation of the Auckland Regional Economic Development Strategy (AREDS) is indicative of the partnership approach needed to lift economic growth and raise the region’s ability to compete on an international level.
“Partnerships are the key to regional economic sustainability, and AREDS provides us with a long term framework to help us achieve economic, social and environmental objectives,” she said. “The ARC is committed to this regional strategy, which is why funds have been committed in our draft regional community plan. We will take a lead role in facilitating the partnership and implementing AREDS from July 2005.”
Cr Gwen Bull encouraged those attending to comment on the proposal and said that it is important that the business community and local authorities work together.
Chair of Auckland City Council’s Strategy and Governance Committee, Cr Mark Donnelly said that Auckland City is committed to supporting economic prosperity and international competitiveness for the city and the region. He agreed with the comments made by Dr Cullen and Cr Bull, and says that the city will continue to ensure a strong partnership approach and co-ordination of economic development initiatives across the Auckland region through their involvement in the AREDS strategy.
Key sectors over the past 12 months have included the housing market, with house prices rising by 19%, with an average house price of $370,000 - well above the national average of $260,000. Fastest growing sectors have been finance, real estate and business services, construction and utilities, and wholesale and retail trade.
According to the report however, “the surge in the housing market has also come with a sting in its tail”. Skill shortages, which have continued to dominate, are further impacted by the housing market. Regional growth as a whole is dependent on attracting skilled workers. However, finding entry-level housing to both purchase and rent is difficult, particularly for those entering the labour market. “The ratio of house prices to income has gone through the stratosphere, and there is genuine concern regarding the cost of living,” the report says.
Other highlights of the report include a look at the changes to transport funding and governance, an update on AREDS, in particular the development of a Business Location Strategy which takes a long-term view out to 2031 and focuses on the supply of land and infrastructure for new and existing businesses. The report also provides a synopsis of economic activity in different sectors, and looks at the future prospects for the region.
Business and Economy is produced
annually by the National Bank of New Zealand for the ARC and
all seven local councils. Each year it provides a summary
of current economic trends, prospects and challenges in the
Auckland region. It also features key issues facing the
region at the time.