Wednesday, December 6, 2023

There’s life in some ‘zombie towns’ yet

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The prospect of rural NZ being filled with ‘zombie towns’ is not as likely as it once seemed, but challenges still remain for many.
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The headline surge in national migration numbers has drawn rural winners and losers into its slipstream, based on the latest Infometrics report on Stats NZ population data. 

To June this year New Zealand experienced a record gain of 129,000 arrivals in 12 months, offset by 32,000 mainly younger Kiwis going overseas, leaving a net gain of 91,600, the equivalent to Palmerston North’s population.

The rural districts that experienced the strongest gains in a single year include MacKenzie, Westland, Kaikoura, Western Bay of Plenty and Southland, all with growth rates between 1.2% and 3.6% for the year.

Infometrics senior economist Nick Brunsdon said prior to 2023 most rural areas also enjoyed solid internal migration as people moved back over the 2021-2022 period, partly in response to covid. 

He said acute labour shortages in meat processing plants had translated to continuing solid growth in the past year for some as meat companies scrambled to take advantage of lifting immigration lids to fill long vacant positions on processing chains.

“That impact came through in the South Island in particular. We had Clutha and Waitaki have an increase of 1.3% in population each, driven mainly by an increase in employment in the manufacturing category, reflecting the meat companies filling positions.”

In the North Island, Wairoa also enjoyed a 1.3% gain in population to June this year, despite the impact of Cyclone Gabrielle and repeated flooding events.

Brunsdon said while meat processing had increased numbers in some areas, in others rural employment had tended to remain soft, and, if anything, on a long-term decline.

Grey District, Gore, Kawerau, Buller and Timaru all continued to languish in the population growth stakes, experiencing zero or negative growth in population in one of the past two years.

“The reality is for some areas they went from the early 1980s to 2013 losing people almost every year. “

However, after 2014 there was a notable lift and a net gain in migration for many rural areas, with Wairoa and Clutha experiencing their strongest gains for many years.

Almost a decade ago economist Shamubeel Eaqub gained headlines with his prediction that some rural NZ towns would become “zombie towns” as their populations shrank and aged, leaving them hollowed out and barely functioning.

While the growth many have enjoyed in recent years appears to have put paid to this, Brunsdon said there are still challenges for some towns as they grapple with lower birth rates, an aging population and fewer international migrants. Those that are over two hours from a major urban centre will also be hit harder.

Some districts that may have benefitted from significant increases in dairying and its accompanying employment in the past decade may also face a plateau or even decline in light of fewer if any conversions going ahead.

Improvements in farm productivity, farm amalgamation and technology could also see a slide in employment.

Brunsdon cited the example of Ōtorohanga, which recorded 3000 rural workers in 2000, and now has just 1500.

Lower birthrates could also have a greater impact in the more European-dominant populations of some South Island districts than in more ethnically diverse North Island districts such as Waikato and Northland that also have more young Māori in their demographic.

“The reality is that if you want to maintain the same annual population growth rate, you need to keep growing net migration, even in those higher growth areas like Waikato and Auckland. 

“If you don’t grow your total population, your workforce will decline. As the over-65 dependents increase you need to keep your school leavers to enter the workforce locally.

“They may leave – that has always happened – but as long as they come back.”

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