Projected employment growth may be hindered by ageing population: report

Population growth may not keep up with employment, says Market Economics' Lawrence McIlraith. Photo / John Borren

Employment in Tauranga is projected to grow by almost 50 per cent by 2048, according to a draft report presented to Smart Growth.

But the report's author has raised concerns that Tauranga's ageing population may hinder this growth.

The report, commissioned by Smart Growth to feed into its planning studies, was presented at a Smart Growth Leadership Group meeting last week by author Lawrence McIlraith, associate director of Market Economics.

It was expected to be finalised next month.

The report estimated that employment would grow by 49.6 per cent in Tauranga and 35.5 per cent in the Western Bay by 2048, to reach a total of 123,3000 workers - an increase of 39,650 on the current total.

The effects of the ageing population was then predicted to kick in, with employment growth then predicted to flatten to less than one per cent from 2048-2063.

Mr McIlraith said the projection was "conservative" and a key concern was whether employment growth would be constrained by population changes as the population aged.

To meet these employment projections, the region would need more workers travelling into the area, and people working longer.

Mr McIlraith's report stated: "Together with the ageing population we expect an increase in the number of people working past pension age to increase. The effect of this is to lift the effective size of the labour force."

Secondly, the number of workers commuting into the area for work was expected to increase. For example, the latest 2013 Census suggested about 1.7 per cent of the area's labour force travelled from areas such as Waihi, Paeroa, Rotorua, Hamilton and Whakatane.

Mr McIlraith said the key challenge of finding suitable labour was likely to intensify, and competition for talent was expected to remain a core business issue.

The report also suggested that by 2063, about 15,000 employees would be based outside traditional business areas such as the central business district, and major retail and industrial park locations. This include not just home-based workers, but also service sectors such as hospitals and rest homes, as well as areas of agricultural activity.

Tauranga Mayor Greg Brownless said the report was positive.

"It's great that despite the various changes in technology that are set to confront us, and the fact that jobs will be different, they are still forecasting that there will be strong demand from employers in this area," he said. "If that turns out to be the correct that gives me quite a bit of comfort."

Priority One chief executive Nigel Tutt welcomed the estimate of strong job growth.

"Basically, from an industry perspective, they're expecting really strong growth and that will create a whole bunch of jobs, though there may be some challenges getting the people for those jobs," he said. "It's a very healthy picture."

Ageing population impact

• If one in four of the 65-69 year cohort remains active in the labour force by 2063, this could add 3 per cent or 4,190 workers, to the Tauranga/Western Bay of Plenty labour pool.