30 Jan 2014

Auckland construction builds growth

6:56 am on 30 January 2014

Auckland Council says construction in Auckland looks set to join the Christchurch rebuild as a major contributor to New Zealand's economic growth this year.

Auckland's outlook for 2014 is the best it has been in seven years and the council's chief economist Geoff Cooper said there was strong economic growth at the end of last year, with Auckland growing at 2.8 percent in the year to September.

"And that, I think, is indicative of the important role that Auckland's playing in the New Zealand economy at the moment," Mr Cooper said.

"The rest of New Zealand grew at about 2.5 percent and once you strip out Christchurch, with the rebuild there, you're looking more at like 1.4 percent."

The labour market had had little improvement despite the increased economic activity but Mr Cooper said there was reason to be optimistic about Auckland's situation.

"What we've seen is a shift from part-time to full-time, so businesses are starting to get some more growth coming through, and they're shifting people from part to full-time, so we haven't seen an impact on the unemployment rate because of that," he said.

"We're starting to see some leading indicators come through that give us reason to think that that (unemployment rate) will eventually drop, and one of those is starting to see the number of job vacancies going up at the moment."

Meanwhile, Mr Cooper said the slowdown in the Australian economy was likely to have an impact on Auckland, with fewer people heading across the Tasman and more returning to Auckland.