Halfway through the year and I would say Auckland, if not all of New Zealand, feels like it just hasn’t really begun. And if you read any market report, the suggestions from economists are that it won’t unfortunately happen until early 2025. Inflation, while having decreased from its peak, is still elevated and is above RBNZ’s target, however early indicators are showing that New Zealand has exited the recession which is a good win. As reported by the ASB, a weaker economic backdrop and a looser labour market will help inflation settle sustainably around the 1-3% inflation target range. Stats NZ revealed GDP growth of 0.2 per cent in the March quarter. Many businesses will be sighing with relief on most of this news however it’s always smart to be wary as we aren’t out of the woods completely.
Much has been reported about the impact of the change in government on Wellington and the public sector, however it must be noted it has had rippling effects across Auckland and the private sector as well. Therefore, what are the impacts that we’ve seen on the ground?
One of the many unfortunate results of our economic situation is a much reported “brain drain”. New Zealand citizens continue to leave the country at record levels, according to new Stats NZ data. More than 81,000 Kiwis departed long-term in the year to April for a net loss of 56,500, exceeding the previous record of 52,000 in the year to March. New Zealand’s total net migration gain remains at historically high levels, but it continued to decline. New Zealand gained 98,500 migrants in the year to April. That is down from 106,000 in the year to March.
Typically, when we lose Kiwi’s on the good old fashioned overseas experience, we normally do get them back when they decide they want a more “Kiwi lifestyle”. However, it’s not quite the same when we lose Kiwi’s to Australia. So - how will the government plan on enticing them back? And given all we’ve said about the economic climate and the reality for public and private sector organisations, how will businesses retain our best and brightest? We’ve got a few recommendations below.
Now when you consider all of this and that markets move in cycles, one can’t help but think if spending / investment / project decisions are building up when they push go, will they all push go together? And when this happens, what will be the impact? Could we see another post-COVID hiring market? Will it be exasperated with our increased net migration?
Will organisation’s be even more impacted based on how they approached their employees and hiring during this time? These are questions that businesses and the government must be considering.
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Auckland, the ‘City of Sails’, is known for both it’s beautiful scenery and for being a growing urban oasis.
Tāmaki Makaurau is home to the largest Polynesian population in the world and also houses large European and Asian communities. With trade relations currently being developed with other regions such as India and South America, immigration has increased significantly from these destinations over the last several years – creating a very dynamic and diverse city. This diversity contributes to a plethora of talent as well as amazing food options.
Auckland's relaxed working environment lends itself to a good work-life balance, which attracts talent from around the globe. Whilst the cost of living is relatively high in this city, easy accessibility to social services and New Zealand's world ranking as the easiest place to do business, makes it an enticing city to reside in.
Auckland is also a land of opportunity, operating as a hub for many start-up and scale up businesses with big aspirations. New Zealand's 'number 8 wire' mentality, which represents the Kiwi problem-solving and can-do attitude, permeates throughout Auckland's culture and in all that its citizens set out to do.
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