17 Oct 2019

How living and working in NZ has changed over the past 40 years

8:40 am on 17 October 2019

There have been significant changes over the past 40 years in where New Zealanders live and what they do for a living, a new report shows.

Industrial worker in manufacturing plant grinding to finish a pipeline.

There has been an overall decline in manufacturing industry workers. Photo: 123RF

A decline in the manufacturing workforce and a growth in employment in big cities and towns have changed the face of New Zealand, according to a Productivity Commission report.

The report showed an overall trend of a declining manufacturing industry, and a migration of New Zealanders towards big cities, as well as a number of other, smaller towns which have been able to stand out.

"It's a pretty well-known trend that we've seen: this is a big shift in employment away from manufacturing as well as primary sector employment, into services," the director of economics and research at the Commission, Dr Patrick Nolan, said.

"Services are now about 75 percent of the economy, so that makes thinking about the productivity of the services sector especially important."

Back in 1976, one in four New Zealanders were employed in the manufacturing sector. That's now changed to just one in 10, with many people moving over into other industries, such as professional services, health and education, accommodation and hospitality, and financial services.

It's the move away from manufacturing which drew people towards the big cities. In the 1970s, the landscape of New Zealand was defined by different towns housing different industries.

But this report shows the growing similarities between many small towns, where people can migrate more easily between places because of similar jobs.

The result of this, the report concludes, is that people are able to prioritise other factors beyond employment.

What did the report look at?

The Productivity Commission's New jobs, old jobs: the evolution of work in New Zealand's cities and towns studied the 30 biggest cities and towns, and looked at employment rates.

Across the entire country, there has been a growth in employment by 48 percent - roughly 1.1 percent year on year - but different places tell different stories.

The fading of specialised industries as they are overtaken by technological advances has resulted largely in a reallocation of jobs in the larger centres, such as Auckland, Wellington and Christchurch.

Nine cities and towns for instance, showed growth of over 65 percent.

But Dr Nolan said some smaller towns that have natural amenities have done well for themselves.

"Look at Queenstown, it's done really well by positioning itself as a hub of tourism. You see in smaller towns that have good weather, or picturesque views, that factor is important to.

"If you look at Blenheim for example, it's done very well, out of its concentration into the wine industry. Different things work for different towns and cities, so it's really interesting to see the different factors at play."

But four places have had a decline in the total number of employment. It reflects what happens when a town dominated by a single industry loses that industry, Dr Nolan said.

"If you look at Tokoroa in 1976, there were about 7,500 people in employment in that town. About half of those people worked in paper, pulp or wood product manufacturing.

"And those industries really did lose a lot of jobs and you can see the impact that had: overall Tokoroa lost about 44 percent of its employment over the last four decades."

Looking to the future

The shift away from the manufacturing industry in New Zealand was also matched across the rest of the world.

Manufacturing employment in the US, for example, declined from 32 percent in 1950 down to 9 percent in 2010.

And with further changes in the job market - particularly around the technological sector - Dr Nolan said there is some concern about what the future might hold.

But the figures as outlined in this report show New Zealanders are up for the challenge.

"New Zealanders are very adaptable people, and the history of the labour market in New Zealand is one of change.

"We don't need to get anxious about these changes, we do need to think hard about what they're going to mean, and how we need to adjust, but we're actually in a pretty strong position to make these changes."

With some towns now shown to have lagged behind in employment growth, Dr Nolan said to better service those towns, concentration needs to be focussed on the industries that service every town.

"There are certain jobs and certain industries which are really just there to serve the local population - you've got education, healthcare, dentists.

"So really thinking about those industries and how we lift the productivity and health of those industries is actually important for those regions that haven't done so well.

"If we can lift the productivity of those industries then we're going to have a strong regional impact right across the country."