Building projects save longer Dunedin outlook

New long-term economic forecasts show a resilient Dunedin despite dire predictions for education, employment and visitor numbers in the short-term and medium-term.

Dunedin city councillors are due to decide how the Dunedin City Council consults the community on its forthcoming 2021-31 plan on Tuesday — and councillors would do so with an eye to some significant forecasting assumptions, including growth projections in a post-Covid-19 environment, council finance committee chairman Mike Lord said.

The forecasts included in a new 15-page report to the council by economic forecasting consultants Infometrics would “without a doubt” inform the 10-year plan process despite the considerable economic uncertainty created by the global pandemic.

Also, while the city was not without its challenges it was in as good a position as possible to withstand economic shocks.

“We don’t know what the future holds,” Cr Lord said.

“I don’t say that in a smug way, we just don’t know. What we do know is that due to the very nature of the city, it will be resilient.”

Agriculture, forestry, and planned public sector spending on major construction projects made him “reasonably confident about the future city”.

The council was three years in to a planned 10-year, $860million capital expenditure programme, he said.

The council’s economic consultants had advised the council that despite Dunedin’s migration being predominantly domestic, the city could expect a 20% drop in net migration from 2020 to 2024.

Due to several contributing factors, a 49% drop in international education revenues should be expected in 2021.

While 63% of the city’s visitors were domestic tourists, international visitor numbers were not expected to recover to pre-Covid levels until 2031.

While Dunedin’s population would be “relatively resilient” in the near term, Dunedin’s high growth rate over the past five years was unsustainable.

As the council had previously forecast, population growth would slow in the 2030s and was unlikely to reach 150,000 in 50 years.

The firm offered 142,783 in 2068 as its most plausible projection.

However, the report to councillors also pointed to a rebounding jobs market led by a construction sector that was due to start major publicly funded projects.

Over the medium term, Infometrics’ report said, public sector construction investment — in particular, the $1.4billion new hospital build and the $600million university redevelopment — would save jobs.

While construction jobs would be lost next year, employment levels would be above pre-Covid levels by 2022.

Further, after a sharp drop of 9.4% between March 2020 and March 2021, overall employment was expected to surpass pre-Covid levels by 2023, the report said.

Council staff had proposed “early engagement” on the 10-year plan. That could begin next month.

Formal consultation and engagement on the draft 10-year plan is expected to begin in March next year before the council’s deliberations and hearings in May.

Formal consultation would follow, the staff reports said.

Post-Covid-19 Dunedin city growth projections

•20% drop in net migration from 2020 to 2024.

•49% drop in international education revenues in 2021.

•International visitor numbers to recover to pre-Covid levels in 2031.

•Construction employment levels above pre-Covid levels by 2022.

•Overall employment expected to exceed pre-Covid levels by 2023.

•Dunedin’s population estimated at 142,000 in 2068.

Source: Infometrics 

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