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Auckland's economy: strong outlook

Joint Media Release Auckland City Council and Auckland Regional Council

Auckland's economy: strong outlook but no time for complacency

7 June 2006

Auckland's economies, which performed well in the year to March 2006, face a slowdown in 2007. But business will pick up into 2008, according to economic reports released at a launch event this morning.

The reports, jointly prepared by the New Zealand Institute of Economic Research (NZIER), show growth of 2.8 percent regionally, and 1.8 percent within Auckland city in the year to March 2006. The national growth rate for the same time was around two percent.

"The region's GDP has exceeded two percent for the fifth consecutive year and this bodes well for the region's future," says Auckland regional councillor and regional economic development forum chair Michael Barnett.

Barnett says that while the region's productivity growth over the past five years didn't compare favourably with most Australian states (with the exception of New South Wales), Auckland retains a strong outlook. "Domestic consumption will remain reasonably high, and regional domestic activity - partly the impact of on-going infrastructural investment - will have a positive influence," he says.

The regional report says the high New Zealand dollar and immigration slowdown is having an effect but that an export-led recovery was imminent - with a lag.

Regional figures to March 2006 reveal average weekly earnings of $869 per week, above the national average of $826; the average house sale price of $424,000 is 30 per cent above the national average of $325,000. They also show a younger population (relative to the rest of the country), which is estimated to reach 1.7 million by 2026.

The regional unemployment figure stood at 3.9 percent, matching the national figure to March 2006, while Auckland city's, at just over three percent, was its lowest in over a decade.

Auckland city mayor Dick Hubbard says Auckland's continued growth presents great opportunities and challenges but there is no time for complacency. "High profile events like the Rugby World Cup 2011 will force us to accelerate infrastructure developments so we can host a huge number of people, get them to the games and let Auckland shine on the world's stage."

Auckland city continues to play a dominant role in the regional economy, contributing around 50 percent of GDP and 17 percent of New Zealand's employment. Auckland city also plays a specialised role regionally, with its concentration of professional services, the creative and information and communications technology industries. Mayor Hubbard says his council is committed to addressing infrastructure needs and supports sustainable economic growth.

A guest speaker at the launch, Infratil executive Tim Brown urged increased private funding of infrastructure, and a strong public sector focus on outcomes. He said there were fundamental differences in private and public sector perspectives.

Brown says Infratil's recent investment in Auckland's Stagecoach bus and Fullers ferry operations was based on a belief that doubling public transport patronage would help create a win-win situation: "A successful New Zealand has to encompass a successful Auckland and we want to play a part in what is going to be New Zealand's only world class city-region."

The Auckland region was, earlier this year, judged the fifth best place to live on the planet by the Mercer quality of life index, ahead of Melbourne and Sydney, while the World Bank rates New Zealand first in the world for ease of doing business and protecting investors.

The Auckland Regional Council (ARC) has progressively adopted a more involved role in economic development. Recently, ARC established AucklandPlus, the region's official investment agency, dedicated to promoting the region's business and investment opportunities worldwide. AucklandPlus exists to implement key elements of the Auckland Regional Economic Development Strategy, which is the region's statement of intent for building an internationally competitive, inclusive economy.

ENDS

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