New Zealand cities are becoming less competitive against Australian counterparts raising questions about their ability to attract skilled workers and alleviate the current labour shortage according to PwC’s latest report, Competitive Cities: A Decade of Shifting Fortunes.
The report highlights the challenges ahead for our urban areas using the lens of income and cost of living. It is the first release from PwC New Zealand’s Cities Institute.
Competitive Cities: A Decade of Shifting Fortunes compares six New Zealand cities (Auckland, Hamilton, Tauranga, Wellington, Christchurch and Queenstown) to Australia’s five main centres (Sydney, Melbourne, Brisbane, Perth and Adelaide). Key findings include:
PwC Chief Economist, Geoff Cooper says, “Today’s skills shortage is among the worst recorded in the last four decades and has been steadily climbing since the financial crisis. If New Zealand is to attract the right kind of workers, it needs cities with a compelling proposition for people.
Our research shows that our cities are struggling to compete against the main centres in Australia. High house prices in New Zealand, sluggish income growth and higher transport and food expenditure are to blame.”
Hamilton, Tauranga, Wellington, Christchurch and Queenstown are now competing more strongly for talent in New Zealand. Key factors include:
“From an income and living costs perspective, New Zealand’s smaller cities have made significant gains in competitiveness over the decade. However, our research reveals they all face greater challenges than many Australian cities when it comes to housing costs and basic expenditure.
“In Auckland, the triple whammy of rising house prices, sluggish income growth and increasing costs for basic necessities is at its most extreme. As New Zealand’s largest and most internationally competitive city we need to find a way to position it as the go-to city for skilled workers.” says Cooper.
The report outlines three recommendations for improving the ability of New Zealand cities to attract talent:
“Our report reveals the predicaments ahead for our cities but it is possible to future proof our urban areas. We need a greater focus on city ecosystems to fully understand the current situation and determine a sustainable way forward. We should follow Australia’s lead by creating a Minister for Cities who can provide a centralised channel of communication with strategically important urban areas as well as advise on urbanism in relation to key issues such as wellbeing, inequality and economic performance.
“Another pressing issue is lack of adequate urban data. While there have been improvements recently, more needs to be done to fully understand our cities, such as providing regular urban migration data and urban land value data that would be useful to policy makers. The Household Economic Survey could be expanded to all cities and there is a need for regular city-specific consumer price indices and quarterly GDP estimates.
“Finally, Auckland is facing a unique set of challenges. We propose creating an all-of-government Economic Competitiveness Agenda including concrete steps for lowering the cost curve of urban living, building broad-based wage growth, attracting the smartest minds and overcoming the labour shortage,” concludes Cooper.
Communications Manager, PwC New Zealand
Tel: +64 21 149 5516