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Technical report

This study focuses on short-run changes in economic competitiveness, using a concept of ‘discretionary income’. Income and cost of living is dynamic, varying considerably between cities and across time. Taking a comparative approach we study changes to the balance sheet of a prospective resident, uncovering the shifting state of competitiveness for labour over the last decade. We show which ones are gaining and which are falling behind. In the face of persistent and chronic skills shortages across many New Zealand cities, these differences matter more than ever.

We focus on six key cities in New Zealand. These cities are Auckland, Tauranga, Hamilton, Wellington, Christchurch and Queenstown. Together, these cities (collectively designated Growth Cities) and their supporting growth areas accounted for 72 per cent of all growth in New Zealand between 2012 and 2018, adding some 346,000 people (Table 1).

For every new business established in the rest of New Zealand over the last six years, five were established in Growth Cities. Likewise for employment, for every new job in the rest of New Zealand, three were created in Growth Cities. Population growth is linked to ever concentrating employment and business in these six cities. Until about 2010, the number of businesses was approximately equal between Growth Cities and the rest of New Zealand (see Figure 3). This changed in 2010 and the wedge is getting larger.

This report is separated into six sections. Section 2 describes the methodology. Section 3 describes changes in income and cost of living, while Section 4 charts the shifting economic landscape of New Zealand’s cities over the last decade. Section 5 extends the analysis to Australian cities and Section 6 concludes with recommendations to enhance New Zealand’s urban competitiveness. Individual city reports are available separately.

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