Auckland economy yet to bounce back

19 Mar, 2010
IPP Director, David Wilson
IPP Director, David Wilson

The recovery of the Auckland economy is by no means a foregone conclusion.

That’s the message from Business and Economic Research Limited (BERL) and the AUT Institute of Public Policy’s (IPP) latest economic forecast for Auckland.

The second report in the quarterly series was launched today and forecast some improvements in various sectors but continued slow growth or the status quo in others.

In summary BERL forecasts for Auckland:
* a marginally brighter picture for manufacturing exports, but a difficult year for exporters selling to the US and European markets
* modest (at best) employment growth
* another ‘stand still’ year for the retail sector
* considerable growth in house building activity but overall only “catching up” to lost activity
* net migration gains in the short term, but easing over the medium to longer term as Aucklanders look to greener pastures across the ditch

BERL Chief Economist Dr Ganesh Nana says there are “few signs that the Auckland economy is leading the nation into recovery. On the contrary, the picture for Auckland seems to follow that of nation.

“And looking beyond the short term, with New Zealand’s export revenues increasingly concentrated in primary commodities and associated processing, the question of the role of the Super City within such an economy needs to be urgently addressed.

“Auckland could continue as a property and consumer-oriented economy operating as a transport hub for New Zealand. Or, it could look to truly lead by providing that point of difference for NZ Inc to leverage. Such a transformation has proved elusive for some time, and there is little sign that we are any closer to finding that export and wealth-generating leader for the nation.”

IPP Director David Wilson says the proposed governance structure for Auckland is unlikely to deliver the integrated approach that is needed to deliver growth and to see Auckland play its part in the country’s economy.

“If Auckland is to play its part in the New Zealand economy some stubborn structural elements in the economy need to be addressed – business as usual will not cut it. To do this will require an integrated regional approach, with both the public and private sectors contributing and in partnership with Wellington and neighbouring regions. In my view we are a long way from achieving those things in the structures proposed for Auckland’s governance” says IPP’s Director, David Wilson.

“The strategy advanced by the Government ignores history, fails to connect in any meaningful way with the diverse populations and neighbourhoods of the region, and in the process it raises questions about how the trust and confidence of citizens and ratepayers in the new governance structures will be realised,” says Wilson.

“Instead of connecting with the communities of the region, the Government proposes a structure which will see Auckland massively under-represented by world standards and the potential for minorities to be hopelessly under-represented at the top table. Democracy should not be an afterthought when designing democratic institutions.”

“CCOs must act in the public interest and should only be used for compelling reasons – especially when dealing with public assets.

“While words like efficiency, accountability and transparency sound great, most of the public will fall asleep when they are trotted out, what the public really want to know is ‘can we trust this lot?’”

For more information contact:
Dr Ganesh Nana - Chief Economist BERL
DDI 04 931 9206
Mobile 021 137 6530

David Wilson - Director IPP
DDI 09 921 9999 extn 8399
Mobile 021 763 085

A downloadable copy of the report is available here:

The Auckland Economy: Situation and Forecast March 2010 report