In a recent post I looked at the geographic distribution of New Zealand’s economic activity, finding that the majority of the country’s GDP is produced by its three major cities – Auckland, Wellington, and Christchurch.
However, it’s also really important to look at the growth of regional economies over time. The US news site Vox recently published a great animated map that shows job losses and rebounding growth in the US following the Global Financial Crisis. It’s a great way of illustrating how severe an effect the recession had on some job markets, and how different cities bounced back at different rates.
As it so happens, Statistics NZ has just published new employment statistics for local authorities that allow us to look at changes in employment from 2000 to 2014. After a bit of wrangling with mapping software, I was able to produce a nice little map that shows the last fifteen years of changes in employment.
Blue bubbles indicate job growth, while orange bubbles indicate job losses. We can immediately see a few interesting things:
- Auckland is without a doubt the largest and most consistent source of job growth in the country – the benefits of the city’s large, diverse labour market
- While a lot of places struggled to get back on their feet after the GFC, the Auckland job market rebounded relatively rapidly
- Even before the GFC, outcomes were pretty mixed for a lot of smaller councils – although it’s notable that Tauranga, Hamilton, and Queenstown have grown quite a lot since 2000.
I’ve also taken a look at the data another way – looking at net changes in jobs since the GFC. The following chart compares employment losses and gains since 2008 in Auckland and the rest of New Zealand.
As you can see, New Zealand lost a lot of jobs from 2008 to 2010, and Auckland took its share of the hit. But since then, Auckland has recovered much faster than the rest of the country. According to the latest figures, Auckland now has 22,700 more jobs than it did in 2008. This isn’t fantastic given the fact that the population’s grown by considerably more than that – but it beats the rest of the country, which is still down by 4,500 jobs.
Another way to look at this would be to say that Auckland has accounted for all of New Zealand’s net job growth since the GFC. These figures really show the benefits of large, diverse urban economies, which are:
- Much less reliant on a single industry for jobs and growth
- Much better at generating new jobs, ideas, and industries.
However, Auckland’s relatively quick recovery from the GFC was not matched in New Zealand’s other biggish cities. The following graph shows net changes in jobs since 2008 in Christchurch, Wellington, Hamilton, and Tauranga, which are New Zealand’s larger and faster-growing cities.
These cities have recovered more slowly – it’s only in the last year that they’ve recovered to pre-recession levels of employment. Christchurch has obviously had a rough time of it – it was hit harder by the GFC than the others, and then suffered a second blow after the Canterbury earthquakes. But it’s also made up a lot of ground in the last year alone as the long-delayed rebuild begins.
As I’ve said before, it’s important to recognise the realities – and opportunities – of urban growth in New Zealand. Unless we do something really stupid, Auckland’s going to continue to be the main engine of job growth. It’s imperative that we make smart investments and policy decisions to enable that growth, which means:
- Investing in the City Rail Link and other vitally important public transport projects – the investments that Aucklanders have demonstrated they want
- Improving public transport by rolling out Auckland Transport’s New Network and integrated fares
- Making better streets and public spaces through clever ideas like shared spaces and cycle lanes.
But the data also shows that some of New Zealand’s other cities aren’t firing on all cylinders. Christchurch and Wellington have lagged behind during the recovery from the GFC, as have rapidly-growing smaller cities like Tauranga and Hamilton. I’d argue that many of the policies that are working in Auckland can serve as a model for other cities looking to boost their prospects of attracting (or keeping) that next resident or next business.
Better cities: they work.
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There also comes with an inevitability. Auckland is so much larger that its gravity attracts more people than smaller cities; big getting bigger. When people make a big move – I’m talking immigrants here – they go where they can get a job. Also, whether consciously or unconsciously, they choose a growing place because if their first job doesn’t work out, there is a good likelihood of finding another. At the same time, Auckland’s strength attracting domestic migrants as well, for much the same reason. A lot of immigrants take the first job they can get then make their way to the job they want which, more often than not, is in AKL.
(Naturally there is more to this than nice city, or one that works, or one that is most urban, but I won’t belabor that here.)
This discussion brings up the question (again) of whether it’s good for one city to attract a disproportionate share of national growth. Emptying out the rest of the country, especially the interior may be a good thing for a dairy/ag economy. Fewer development pressures, lower land costs, etc. But this “growth pole” model is also typical of developing countries. (Is NZ a developing country? Hmm?) Often the result of that is rural poverty. I’m not saying that this is happening here, but having a very dominant city is a mixed blessing.
We’re not attracting domestic migrants, not that we really need to – see http://greaterakl.wpengine.com/2014/10/09/northward-drift-no-more/. Although it’s probably true that we’re attracting “working age” domestic migrants while “retirement age” people are more likely to move away from Auckland… I don’t have the stats by age group.
Generally, Auckland’s growth is 2/3rds driven by births, and 1/3rd from net international immigration, although this fluctuates. So I’d argue that the growth is not coming at the expense of other parts of NZ – smaller towns and cities would probably struggle to attract the international immigrants.
Isn’t it just net migration from all sources, rather than international migration? That is, the 1/3 growth from migration includes people migrating to Auckland from elsewhere in NZ. Because if 2/3 of the growth is natural from within Auckland, and 1/3 is from international migration, are we displacing as many people to other places as migrate in from the rest of NZ? That seems strikingly unlikely, not to mention pretty much impossible to accurately quantify.
No it’s not. Search for “Northward drift no more”, 9th October.
Auckland has a net loss from internal migration.
Well, there you have it. However that still goes to the net migration category rather than the net births/deaths category, so it’s safer to call it net migration.
Auckland is not attracting a disproportionate share of growth. It is creating it.
Aucklanders are simply taking in each others washing and calling it job creation. There is very little real wealth generated in Auckland. Real wealth is largely created by the rural sector.
So it all went wrong with the industrial revolution and the answer is to sell each other cows?
What is ‘real wealth’?
real wealth is having to walk around naked because there is no one within 50km to take in your washing. Real wealth is producing a surplus of low-value agricultural products that only has value when it is purchased and transported somewhere else (where incidentally people prefer to live because it delivers higher quality of life).
“Real wealth” (in the economic sense) exists only when a willing buyer and a willing seller agrees to trade. People like Ian are foolish to think that rural areas generate wealth on their own. They don’t.
Rural and urban areas co-exist; they both depend on each to generate wealth.
And without the services provided in Auckland those farmers wouldn’t have had the ability to invest in improving their productivity let alone be able to sell their products to the market. Auckland plays a key part in them being able to generate the wealth they do.
Absolute rubbish Ian.
For a start no one I know up here “takes in other peoples washing” as means of creating wealth. All that would do if it ever happened was it would increase the countries GDP not net wealth.
As Bill English said NZ Inc can’t get rich buying and selling houses of each other (or taking in each others washing).
As for your statement that real wealth is in the rural sector, think again.
Last week a post was done here that showed the breakdown of imports and exports. The “Other goods and services” at over $24B dwarfs the “rural sector” you so fondly think of as the “real backbone” of the country – their contribution (Dairy, meat and wood) combined towards exports (and thus “wealth” by your narrow definitions of “anything thats exported”=wealth) by a hefty margin.
And then add into the effect of tourism (another $8B) and there is only 1 export category (Dairy) bigger than that.
See picture here: http://greaterakl.wpengine.com/2014/11/05/transport-and-economic-growth/
And for all your belief that rural NZ is where the only wealth creation happens – most of the so called rural wealth is actually used to pay for the imports of petroleum, vehicles and machinery – a fair chunk of it needed to allow the rural sector to make most of its “wealth” off the animals back, feed off grass grown liberally feed with fertiliser created using imported oil, then get it to market, on public roads, using more petroleum products, and imported trucks, then exported on multi-national owned shipping services to overseas markets. So talking about “taking in other peoples washing” also applies to the rural sector too.
And a large chunk of that “Other Goods” is from products created outside of the Rural sector, in places like Auckland, Tauranga, Christchurch, as is the Commercial Services exports.
Or do you consider anything outside or Auckland to be “rural”?
Jeez, and here I was thinking that I’d have to put in a counterargument! Nice summary of the economic realities.
Why does everything have to grow? You may have noticed the planet has entered a mass extinction phase and the environment is being destroyed. That’s man’s doing from the pursuit of this “growth”. It is a psychosis, powered by the rich, acting on greed, implemented by the duped.
I certainly agree that there are risks and downsides to growth. For example, I think we shouldn’t seek to grow our consumption of resources, or our waste products, or our disagreements and wars.
But it is good to grow our ingenuity, our happiness, and our ability to share and collaborate. Life’s not all a zero-sum game.
One of the reasons I’m enthusiastic about cities, from an environmental perspective, is that they are efficient. They give people the ability to interact without travelling vast distances, and they are great places to produce (and, yes, profit from) new ideas that require less use of resources.
In a recent post (http://greaterakl.wpengine.com/2014/10/31/climate-change-and-new-zealand-cities/) I highlighted the relationship between urban form and environmental costs. If we want to avoid growing in a pathological way, it means giving people the choice to live close to jobs and amenities, and the option to take public transport or walking and cycling.
Growth for growths sake is indeed not the goal. But a peter notes, growth can occur in ways that reduce environmental footprints. More urban growth and more small footprint diets, e.g. weekday vegetarian, could go a long way to a happy planet.
It looks like you’ve just defined wellington and chch as those TLAs. You should really include the two hutt TLAs and porirua with wellington and selwyn and waimakarirri districts with chch. Matches more closely the super city. Can we see if that changes those graphs at all?
Good point! Basically, the trends are still the same, although the levels are different.
Greater Wellington looks pretty sick – losing jobs continually from 2009 to 2011, and still down 3,500 jobs on its 2008 numbers. Greater Christchurch shows the same basic trends – i.e. only recovering to pre-recession levels in the last year. The three councils are now 7,100 jobs up on their 2008 levels.
The data’s all publicly available – I linked to it in the post – if you want to play with it a bit further!
A major concern is how sustainable is Christchurch’s economic growth? Once the insurance money stops flowing and the navvies go home it is hard to see much dynamism coming from their new low intensity, highly dispersed, drive-everywhere urban form?
Neither Hamilton nor Tauranga, despite being centres of rural production have performed well recently and they are built on this same dispersed un-urban model.
Outside of the quake re-build it’s all Auckland. Is this simply because of scale and form? Certainly worldwide the most dynamic economic units are more intense cities…
Best hope for hamilton and tauranga is to become satellite cities to auckland, in much the same way as newcastle is to sydney. Offer a cheaper alternative for people who want to be close to auckland but not necessarily live there. Prerequisite? frequent fast inter-city rail connection.
(If anybody’s checking back at this late date…)
A factor I forgot to mention is that international migration is very fluid. A lot of migrants leave after a short time – they have learned all the English they need, they don’t like it here, their mother is sick, they lost all their money, whatever. I don’t know if there are numbers on churn for local areas.