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What we know about Auckland’s economy – in graphs (UPDATED)

Jihee Junn takes a look at some nifty graphs from ATEED’s latest report and gleans some interesting insights about the city’s economy and future.

*Update: a previous version of this article used outdated information from ATEED regarding Auckland’s ethnic makeup. ATEED has now updated the graph and figures in its report.

Last week, Auckland Tourism, Events and Economic Development (ATEED) launched the Auckland Growth Monitor, an annual report outlining key information on the people, businesses, innovation, and visitors that make up the city’s economy. Alongside the report, ATEED also launched the Auckland Index, its online tool using data from the report to provide a number of basic data visualisations.

With these tools intended to provide “further valuable support to our local businesses and organisations”, here are some of the more interesting points to mull over.

The population is growing more rapidly than ever

In 2000, Auckland’s population was just over 1.2 million. Since then, the city’s population has grown every year with 1.65 million people (or 34% of New Zealand’s total population) currently living in Auckland. This trend is set to continue for the next few decades because, by 2033, Auckland’s population is projected to reach 2 million residents and account for over 37% of the population.

But it’s notable that in the last two or three years, Auckland’s rate of growth has accelerated rapidly. In 2015, 2016, and 2017, more than 43,000 new residents were added every year  – the first, second, and third highest numbers recorded in the report.

This means we’ll probably need more of pretty much everything: more houses, more businesses, more amenities, and more spending as Auckland becomes an increasingly populous (and prosperous) global hub.

More than 43,000 new residents were added in 2015, 2016, and 2017 (Auckland Index)

The population is ageing

Like most developed nations, New Zealand is an ageing population as people have fewer children and live longer than ever.

In Auckland, the proportion of older and younger residents is set to even out over the next two or three decades which will most likely put a strain on the country’s steadily shrinking workforce. This, in turn, could see people retiring later in life as more workers will be needed to sustain New Zealand’s growing economy. Sectors like healthcare and aged care will also likely be put under pressure due to the rising numbers of elderly to take care of, while sectors like early childhood and education could also change due to the declining youth population.

2018 (Auckland Index)

2043 (Auckland Index)

The rate of unemployment is going down

In 2010, Auckland reached its highest rate of unemployment (60,000+ people out of work) as the effects of the global financial crisis in New Zealand reached its zenith. Since then, Auckland’s unemployment rate has more or less decreased to just over 41,000 people in 2016.

But despite the spike in unemployment between 2008 and 2010, the number of people in work have been on the rise since 2000 which is a reflection of the fact that not only are we creating more jobs, but  there are more people in Auckland to undertake them due to population growth.

Unemployment spiked in 2010 (Auckland Index)

The labour force is getting more highly skilled (with some exceptions)

Over the last decade and a half, highly skilled workers have comprised an increasing proportion of Auckland’s workforce while the number of low skilled and medium-skilled workers have slowly decreased. Today, 48% of Auckland’s workforce is defined as highly skilled and medium-highly skilled, which is a pretty promising point of defence if robots do ever decide to completely overtake the manual labour market.

The story, however, is slightly different when it comes to Māori, which is reflective of the continuing inequalities of Auckland’s workforce and education. While 48.2% of the city’s wider population are in highly/medium-highly skilled work, just 41% of Māori occupy the same skill level as of 2016. Meanwhile, 51.8% of the city’s wider population are in medium/low skilled work, while almost 60% Māori undertake the same level of work.

Aucklanders are getting more highly skilled (Auckland Index)

There are more Maori in low/medium skilled work than highly/medium-highly skilled work (Auckland Growth Report)

More Māori are younger

While there may be inequalities in Auckland’s workforce, the large proportion of Māori youth (33% of Māori in Auckland are aged 0-14 compared to 19% for all other ethnicities) suggests things could change for the better, especially if an improved education system has anything to do with it.

The number of Māori youth in Auckland is notable (Auckland Growth Monitor)

* The population is ethnically and culturally diverse

Auckland is already a multicultural powerhouse, and in the context of the city’s ambitions to become a globally recognised centre of commerce, its diversity is sure to work in its favour. In fact, 39% of the city’s population was born overseas, making Auckland the fourth most diverse city in the world behind Dubai, Brussels, and Toronto.

With ethnicity, those who identify as European still make up the bulk of city’s make-up at 59%. Asian comprises the second largest chunk with 23%, followed by Pacific people and Māori with 15% and 11% respectively.

Auckland’s multicultural ethnic makeup (Auckland Growth Monitor)

Auckland’s prosperity is New Zealand’s prosperity

It probably comes as no surprise that as Auckland’s gross domestic product (GDP) has increased, so has New Zealand’s. In 2016, the city’s GDP was $84.8 billion which made up 38% of New Zealand’s total GDP ($140.5 billion). Sure enough, when Auckland’s GDP growth rate dropped dramatically in 2009 (from +2% in 2008 to -4% the following year) due to the global financial crisis the year before, New Zealand’s GDP followed suit. Just this time, on a downward trajectory.

It’s also interesting to note that bar 2009 and 2010, Auckland has consistently showcased its strength as the economic linchpin of the country as its rate of GDP growth has either exceeded or equalled the rest of New Zealand’s. It also comes as no surprise that Auckland was hit hardest in the aftermath of the global financial crisis due to the number of international companies based in the city.

Auckland Index

Auckland is New Zealand’s commercial, tech, and food processing hub

The technology sector (which includes cyber-security, big data, and fin-tech) contributed $7.8 billion to New Zealand’s GDP in 2016 and accounted for 9.6% of Auckland’s GDP. Almost half of New Zealand’s tech sector employment is based in Auckland, accounting for 27% of the region’s total workforce. Currently, 66% of the country’s top 200 tech companies are based in Auckland

The commercial services sector (which includes financial institutions, professional services, and consultancy firms) contributed $17.7 billion to New Zealand’s GDP in 2016 and accounted for 22% of Auckland’s GDP. Almost half of New Zealand’s commercial sector employment is based in Auckland, accounting for 21% of the region’s total workforce.

The food and beverage sector (dominated by dairy, meat, and wine) contributed $3.3 billion to New Zealand’s GDP in 2016 and accounted for 3.9% of Auckland’s GDP. Just under 30% of New Zealand’s food and beverage sector employment is based in Auckland and accounts for 3.6% of the region’s total workforce.

The key companies in Auckland’s technology, commercial services, and food & beverage sectors (Auckland Growth Monitor)

Co-working is increasing dramatically

Since 2011, shared office spaces and co-working facilities (ie: Generator, Colab NZ, B:Hive) have increased by 886%. Not only is this reflective of the increasing amount of freelancers, remote workers, frequent travellers, and start-ups in Auckland, it’s also reflective of the surge in property prices as businesses look to cut costs by sharing office space instead.

B:Hive is the latest co-working space on Auckland’s North Shore (smalesfarm.co.nz)

jihee@thespinoff.co.nz / @jiheejunn


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