Trend analysis indicates that New Zealand current economic and social development over the mid-term remains unsustainable. Moreover, critical functional capacity including infrastructure development, health care advancement, and commercial growth are no longer resilient.

The primary factor across all sectors appears to be the limitation on skilled workers.

There is an insufficient number of skilled people in New Zealand to uphold the current economic and social structures that exist.

Moreover, the functional capacity for most of the existing government driven initiatives and services, including healthcare, transport, and education are in decline.

This decline in functional capacity among core sectors is increasing more rapidly than initially assessed, with analysis identifying that some services may reach zero capacity within the next 9-12 months.

This may result in degradation of key services, substantially limiting the capacity to improve New Zealand economy in the near term, while also expanding the cost for retaining existing essential services.

Some European countries can rely on short-term immigration, as well as capacity management from public and private sector cooperation.

The New Zealand economic engine is not large enough to enable such tools without external injection of new skilled migrants, investment capital, or both.

Cursory analysis of the education, health and transport sectors indicates that all three require substantial additional staffing to reach nominal functional capacity.

Similarly, analysis shows that this declining capacity is impacting a broader range of sectors each quarter, including the building, commerce and hospitality sectors, which have all seen growth ceilings capped by staffing shortages.

The solution to avoid more substantial economic and social decay requires both government incentives for driving growth and immediate increases in skilled migrants required to fulfill essential services.

If the government does not address the primary limiting factor of skilled worker shortages within the near term, trend analysis shows the potential for sector wide dysfunction and substantive failures.

In the health sector such dysfunction may result in additional deaths caused by both staffing and skill limitations, in the transport sector this will result in increased supply-chain anomalies, and in the education sector this will result in degradation of overall skill development.

Private sector solutions will be focused on reduction of services to enable reduced staffing numbers, thereby retaining some balance sheet growth and short-term profitability. This creates a negative cyclic by which staff declines help create short term superficial growth at the cost of long term capacity.

Among public sector solutions will be the increase in debt to compensate for the decay in functional capacity.

Should such broad sector based failures occur, they will likely require major increases in government debt to overcome growing costs associated with restructuring, outsourcing solutions and infusing funding for rebuilds of collapsed systems and staffing.

Therefore, immigration will remain a key economic driver and social development tool for New Zealand in the near to mid-term. The functional capacity will be determined by how quickly skilled workers can be integrated into the existing economy.

Cursory analysis indicates that current immigration numbers are substantively insufficient to make any positively impact these degrading sectors.

Trend Analysis Network is a think tank based in New Zealand created to identify and publish analytical results of future trends in politics, society, and economics.

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