Engineering consultant, Tom Parawa recently had the fortune to attend a breakfast seminar held by Bernard Hickey, economic columnist for the NZ Herald.
In this informative event titled The Trade me jobs presentation, Bernard shared great insights into the current state of the New Zealand Economy.
Cobalt’s Tom Parawa details his key learnings and in particular what Bernard predicted for our economy & jobs within New Zealand.
After coffee and a bit of brekkie I sat back to get an economic insight from Bernard Hickey, economics columnist for the NZ Herald. Yes it is normal during the election period to see the economy slow down due to the uncertainty of who will govern New Zealand and where the money will be spent going forward. You'll be happy to know that the economy has bounced back and is in good step, $900m better offer than where the government aimed for. New Zealand has had a recession every year ending with an eight since 1968, but the impending doom and negativity predicted by Winston Peters of the global economy looks not to be the case with GDP up two to three percent.
New Zealand's main centres will continue to thrive with invested interest into housing, especially into the Auckland, Hamilton and Tauranga regions. There's currently over a hundred thousand shortfall of homes all throughout New Zealand, which is where the government looks to invest money, as well as the construction and infrastructure to support this. The only place where this isn't the case, is in Canterbury where the government dropped the RMA (the RMA promotes the sustainable management of natural and physical resources such as land, air and water), this is where you didn't need the resource consent to build after the earthquakes which then flooded the city with housing. With the government interest in housing and Infrastructure, Christchurch will be fighting the government for money to spend in building the city centre up again.
Wage inflation is very unlikely, along with an interest rate explosion. As the houses are built the house prices will come down and with the idea of bringing minimum wage up it will build a much more stable economy.
On the migration front, Labour has agreed with Mr Peters to make the process even more difficult for foreigners to come into the country and work by reducing student work visas, working holiday visas and temporary work visas. However, Bernard believes that the Labour government won't go through with this plan due to the need for immigration to fill jobs. Migration to New Zealand hit a record high in January this year and having recently signed a bilateral agreement with Portugal, which opens easier visa access, he can only see this continuing.
Our immigration numbers into New Zealand is five times above the USA, three times as much as the UK and double on Australia as a percentage to population size. The aging population will create 73,500 job vacancies by 2031, which cannot be filled by natural population growth. Many of these vacancies will be in skilled roles. To meet this gap Christchurch will need to attract and retain skilled working age people through consistent migration at post-earthquake levels to avoid constraining city prosperity (more than 80% higher than historical migration levels).
What other trends or changes do you think will occur for the NZ economy this year? Let us know in the comments box below.
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