Auckland seen as backbone for labour market growth through to 2021: Infometrics

Auckland is expected to deliver the biggest number of new jobs over the next four years as the country's biggest city continues to generate above-average economic growth, economic consultancy Infometrics says.

In a report on the economic outlook for the country's regions and industries, Wellington-based Infometrics predicts Auckland will add 83,550 jobs between now and March 2021, as the service sector and finance in particular boost white-collar professions, an ageing population stokes demand for healthcare and social assistance work, and an expanding population drives education and training jobs.

Auckland's gross domestic product has expanded at an average annual pace of 3.3% between March 2010 and March 2016, outpacing the national average of 2.3%, which Infometrics says reflects "the recovery of service sector activity, around which much of Auckland's economic activity is centred" and as a surge in inbound net migration fuels population growth and aggregate demand in the city.

"With New Zealand's labour market expected to remain relatively tight throughout the next four years, we anticipate that net migration will hold at above-average levels, sustaining strong population growth in Auckland," the report said. "The expanding population will provide a solid basis for continued GDP growth int he region, which will be magnified by the continued expansion of key service industries that are important to the Auckland economy."

Infometrics anticipates other regions that will experience more jobs will include Northland, Waikato, Bay of Plenty, Nelson, Tasman, Marlborough and Otago, all of which it expects will expand at more than 2% a year over the next few years.

Still, the likes of Christchurch, where building work is slowing, is expected to see a slower pace of employment growth.

The report comes ahead of official government figures, which are expected to show the pace of New Zealand's economic growth slowed in the final three months of the year, as a wet spring weighed on agricultural production, which in turn sapped some food manufacturing.

The Infometrics report notes New Zealand's period of strong economic growth while acknowledging medium-term risks to the outlook posed by the threat of a Chinese slowdown and the possibility of trade sanctions between the US and China. The economic consultancy expects New Zealand's GDP to rise an average 2.6% a year until March 2021, with annual jobs growth of 1.7%.

(BusinessDesk)