Recovery expected for Auckland city’s economy

The Auckland City Council’s yearly business and economy report released today predicts stronger household spending, construction activity and exports will drive the city’s economic recovery – but not until the year ending March 2011.

In the year to March 2009, economic drivers including retail spend, and building and property have declined. However, the city’s economy is set to recover, stimulated by modest increases in household spending, residential and non-residential construction activity, and exports.

The report examines the current state of the economy and finds that the city’s economic output declined by 2.4 per cent over the year to March 2009. A major contributor to this was a drop in retail and wholesale activity, due to falling consumer confidence. Falling house prices, tighter bank lending restrictions, a drop-off in demand for exports and uncertainty about the economic environment also played a part.

The report also looks at the city’s future economic outlook and states that although there are signs that Auckland city’s economy will continue to be weak in the year to March 2010, New Zealand – and with it Auckland – is better placed than many countries to pull itself out of the recession.

City Development chairperson, Councillor Aaron Bhatnagar says that Auckland city – with 10 per cent of the country’s population, and 16 per cent of the country’s total employment plays a vital role in stimulating economic performance for the Auckland region and in turn, the country.

“The success of events that the council has hosted, such as the Louis Vuitton Pacific Series earlier this year, injected at least $16.1 million of additional cash into Auckland’s economy and increased the region’s GDP by at least $11.5 million.

“The report talks about the economic benefits that the Rugby World Cup 2011 will have for Auckland and how we are planning a comprehensive programme of economic development activity to ensure maximum economic leverage.

“We are also planning to spend $481 million on capital projects next year across the city including long-term projects like the Auckland Art Gallery restoration, the redevelopment of Aotea Square and the construction of a Marine Events Centre. All of these projects will enhance the CBD as a vibrant location for businesses and residents alike.

“These are just some of the ways that the council is trying to stimulate the economy of the city – and with it, the country – to provide a better environment for long-term economic growth,” he says.

Visit www.aucklandcity.govt.nz/economy for more information.

ENDS

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