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Business, economy and regional growth

Business, economy and regional growth

Business is a key component in the success of any vibrant region. So, as Auckland grows, we need to ensure that this remains to be a place that people want to work and invest in.

The region and country has been enjoying the longest period of sustained economic growth in 40 years. As detailed in Business and Economy 2007 the Auckland Region's economy outpaced New Zealand's growth in 2006:

  • regional GDP grew by 3.1% compared to 2% for whole of NZ
  • participation rate grew to 67.4%
  • unemployment remained unchanged at 3.6%
  • retail sales rose 3.3%
  • region's growth has averaged 3.5% in real terms
  • more than half of the labour force in the region worked in four industries: property and business services; manufacturing, retail and wholesale trade.

Both the Regional Growth Strategy (RGS) and the Auckland Sustainability Framework (ASF) recognise the importance of providing for continued economic growth. The ASF identifies global economic changes and a goal that Auckland's thriving culture of innovation creates an economy that is adaptable, flexible, and resilient to the future change.

Planning for business and economic development

The Auckland Regional Economic Development Strategy (AREDS) provides the
framework and vision for the Auckland region to be an "internationally competitive, inclusive and dynamic economy". AucklandPlus, the official investment agency for the Auckland region, has taken on a key role in the implementation of the Metro Action Plan.

The Business Land Strategy provides a strategic framework for future business growth in the Auckland Region to 2031, consistent with the overall direction provided by the Regional Growth Strategy. It encourages employment intensification in town centres and more efficient use of business and industrial land Including brown field land).

It also identifies a decreasing supply of vacant business land for the more land-extensive group 1 business sectors (manufacturing, wholesale trade, construction, transport and storage).

Agglomeration

Waitamata Harbour and city

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It is increasingly clear that there are productivity benefits from concentrating economic activities together. Studies of overseas and local examples demonstrate that business areas of higher densities have correspondingly higher productivity.

Auckland contains New Zealand's highest concentration of people, businesses and specialists, and is a knowledge base for education and research. It is also New Zealand's hub and gateway to international economy. This high concentration should translate into NZ's growth engine, yielding greater productivity and larger gains for the country.

Population growth in the Auckland region continues to grow the domestic economy, which in turn has been the primary driver of economic growth in the region. Business sectors which service the domestic market (such as wholesale trade and retail) have correspondingly grown faster than other sectors. Primary constraints to growth include the predominance of small and medium enterprises, the relative lack of local capital to invest in growth, and the over-riding focus on serving the domestic market.

Many of the businesses projected to grow and support the domestic market are those that are suited to centres-based locations and which benefit from agglomeration. Many of these sectors, including finance, insurance, professional and creative services, are important components needed for the transition to a knowledge economy.

A future challenge for the region will be to refocus growth around growing exports. The challenge is how best to align land supply and infrastructure to a revised and transformed regional economy that focuses on a greater proportion of value-added and export-focused business sectors.

Evaluation of the growth strategy

In 2007 we released a document called Growing Smarter; a comprehensive evaluation of RGS, which has shown that:

  • strong centres are an important driver of economic growth, so there is a need to continue to focus intensive growth of retail, office and service sector businesses within these areas
  • there will be value in developing and trialling a package of implementation tools to encourage quality intensification in centres, corridors and specialist business areas, and redevelopment of brown field land
  • a more sophisticated understanding of the current and future roles of centres, corridors and business areas in Auckland is needed
  • enhanced monitoring and reporting is needed on economic transformation in the region, business growth and employment-related issues, business land demand and supply
  • the identification of regional business futures to 2010 will assist in linking employment forecasts, regional economic growth aspirations and the spatial implications
  • additional greenfield land needs to be identified for Group 1 business through the use of agreed criteria.
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