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Auckland's economy drags but recovery on way

Published: 10:23AM Friday August 14, 2009 Source: ONE News

Auckland's unemployment rate has climbed higher and its economy declined further than the nationwide figures, according to a report by the Auckland City Council.

The Auckland City Council's yearly business and economy report released on Friday showed that over the year to March Auckland city's unemployment rate was 5.6% compared with the national average of 4.5%, and the city's economic output declined by 2.4%.

Auckland City Council economic development manager Gareth Stiven says Auckland's performance compared with the rest of the country reflects the sectors in which Auckland is involved.

"We tend to be a bit more service orientated, we're involved in banking, insurance and those kind of things that have been more affected by the financial crisis," he says.

Falling consumer confidence during this period of downturn led to a drop in retail and wholesale activity, and building and property declined.

However, Stiven says the council is taking positive steps to improve the outlook for Auckland, such as a large capital expenditure programme that will directly keep people employed.

He says there are also encouraging signs of rising migration into the city, which will likely flow on to increased residential and commercial construction next year.

The council also expects modest increases in household spending will help the city recover.

The report says the outlook for the city is of weak economic growth until March 2010, but that New Zealand was better placed than many countries to pull itself out of the recession.

Auckland city has 10% of New Zealand's population and 16% of the country's total employment.

Read the council's report in depth.

To see NZI Business presenter Nadine Chalmers-Ross's interview with Gareth Stiven, click on the WATCH tab.