New projections will help NZ plan for future, says Infometrics
New Zealand’s national population growth will slow significantly over the next decade, according to new data released by Infometrics.
The economics consultancy’s senior economist Nick Brunsdon (pictured above left) said a softer outlook for net international migration and natural population increase meant population growth would be slower in the next decade than the past decade.
“New Zealand’s population growth is projected to slow from an annual average of 1.6% in the past decade (2011-2021) to 0.9% in the next decade (2021-2031),” Brunsdon said.
“This pattern of slowing down is expected in almost every region. Despite the slowdown, growth remains strongest around the Golden Diamond across the upper North Island, with 1.0% or higher growth in Northland, Auckland, Waikato and Bay of Plenty over the next decade.”
Read next: Global slowdown to hurt NZ economy
Infometrics said the slowdown would require more focus on planning properly for the future, given the population projections. These are featured in a new Population Projections service that Infometrics is launching to support better informed planning.
“Alongside this lower rate of population growth, shifts in growth rates across different age groups will mean that most regions will need to change how they plan for population growth,” Brunsdon said.
“The Infometrics Population Projections are unique in that they are driven by our regional employment forecasts as well as the traditional demographic drivers. We know that people will be drawn to regions where there are job opportunities and we factor these trends into our projections.”
Brunsdon said an increase in natural population was set to slow in the coming decade as the population aged.
“At the same time, net international migration is expected to be lower than it was pre-pandemic for two reasons: the New Zealand government’s tighter immigration policies and fierce competition for skilled workers across most developed nations,” he said.
The 65-years and older age group is projected to be the fastest growing in the coming decade, growing by 3.2% annually nationally between 2021 and 2031, while the 40-64-year-old population is projected to be the second fastest growing group in the coming decade at 0.9% annually.
The 20–39-year-old group is expected to grow by a mere 0.4% annually and the school aged 0-19-year-old age group is projected to decline 0.1% annually.
Brunsdon said it was important for regional and local councils to understand how these national trends would play out in their region.
“The dynamics of future population change has implications for the number and types of houses required in a local area, as well the demand for infrastructure such as schools, health services and retirement villages,” he said.
“These population dynamics also have workforce implications. To meet the skill needs of local employers, councils will increasingly need to find ways to retain and attract younger people to their region and to ensure older people are able to continue working and reskill if they need to.”
Infometrics, found economic activity remained elevated in the September 2022 quarter, driven by stronger tourism activity and solid household spending. Infometrics’ September 2022 Quarterly Economic Monitor showed a 2.6% rise in annual provisional economic activity for the 12 months to September 2022, driven by a 5.4% annual rise in quarterly economic activity due to the comparison with the COVID-19 lockdown which affected the September 2021 quarter.
Read next: Adviser helps clients deal with rising interest rates
Infometrics principal economist and director Brad Olsen (pictured above right) said solid regional economic performances in 2022 reinforced Infometrics’ view that local economies across New Zealand were well-positioned at present, ahead of two years of stunted growth in 2023 and 2024.
“A number of areas with the strongest economic gains recently have been areas with a greater international tourism focus who have seen more limited economic activity throughout the pandemic and had more room to recover,” Olsen said.
“A number of North Island economies have seen more restrained growth as a result of capacity constraints hitting but continue to see the strongest levels of economic activity compared to pre-pandemic times.”
Olsen said the recovery of international tourism and strong expenditure continued with the volume of rising tourist arrivals.
“Tourism activity has come back stronger than first expected with high Australian traveller numbers bolstering activity over the winter season and strong inbound travel from North America too. However, questions remain over how New Zealand will find the resources to support a strong summer of tourism given existing workforce and capacity challenges.”
