E c o n o m i c W e l l - B e i n g S t r a t e g y F O R PA L M E R S T O N N O R T H
JUNE 2010
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This document was adopted by the Palmerston North City Council in June 2010.
Palmerston North Economic Well-Being Strategy 2010
Introduction
A strong, diverse and sustainable city economy
is fundamental to Palmerston North’s future. In
partnership with a strong social infrastructure and
sound environmental management, the economy
is central to creating a sustainable city. There is no
single definition for what is meant by economic
development but there is a strong consensus that the
primary goal of economic development is improving
community well-being. This is achieved mainly
through increased employment and wealth, and
improving the quality of life for residents.
The importance of the economy is recognised by
the Palmerston North City Council through the goals
identified within the Long Term Council Community
Plan (LTCCP). However, while the City Council is
responsible for much of the infrastructure necessary
for businesses to function, there are key roles for
business itself, Horizons Regional Council and central
government to ensure the economy thrives.
Economic well-being
is essential for
the health, wealth and vitality of a city. To achieve
it a number of different agencies - businesses,
support agencies, national government and
local government - all need to prioritise and
focus their energies.
This strategy is a tool that pulls together these
different priorities while making best use of
the talents and resources in the City, allowing
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Palmerston North to fulfil its potential.
Palmerston North Economic Well-Being Strategy 2010
Context
Relationship to Sustainable City Strategy
This strategy attempts to draw together the different
economic drivers for the City, identifying which
ones are the most important and creating clarity
for all the impacting agencies. It is also clear that
many of the economic drivers are regional, national
or international and our influence will only be felt
if we work collaboratively with partners to achieve
common objectives. At this stage the strategy is
concerned with the priorities and actions that need
to be in place to maintain the City’s strong position.
The issue of who is responsible for the actions will be
resolved once the priorities are agreed.
All of the Council’s strategies and plans developed
under the LTCCP have an influence on the long
term growth in employment and wealth in the City.
Planning, community support, democracy and
customer services, investments, leisure, regulatory,
roading and parking, and water and waste all
contribute to the success of local business. In addition,
economic leadership and strategy development is a
primary function of the Council, so it is appropriate
that the elected Council for the City agree a longterm strategy to ensure the economic well-being of
the City.
Palmerston North is recognised as a vibrant,
caring, creative and sustainable city.
City Goals:
Organisational Goals:
•
Palmerston North is a city where people want
to live because of its easy lifestyle and its many
social, economic and leisure opportunities.
•
Palmerston North City Council is financially
responsible and residents are satisfied that
they get value for money from their rates.
•
Palmerston North is a leading city in the quest
to become environmentally sustainable.
•
•
Palmerston North is a city which attracts,
fosters and retains businesses because of the
creativity and innovation of its education,
research and knowledge base.
Palmerston North City Council understands
the many views of the City’s people and those
people understand what the Council is doing
and why.
2007 Economic Development Strategy
The 2007 City Economic Development Strategy
identified the need to better understand the local
economy and significant work has been done,
which informs this strategy. In particular a series
of sector profiles provide a better understanding
of the different components of the Palmerston
North economy and the contribution each sector
makes to the demographic and economic growth
of the region. Sector profiles already completed
include defence, the not-for-profit sector and the
research, science and technology sector (available at
www.pncc.govt.nz, enter ‘sector profiles’ into search.)
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Palmerston North Economic Well-Being Strategy 2010
The completion of these profiles and the ‘Longterm Projections for Palmerston North’ report has
already proved valuable for analysing, reviewing
and developing an enhanced understanding of
opportunities for improving economic outcomes in
Palmerston North.
Relationship to the Regional Economic
Development Strategy
Work on preparing the new strategy has identified
strong growth in the economic linkages between
the City and the surrounding local authorities over
the last decade, with an increased share of the City’s
workforce now coming from outside the City. The
City is recognised as a significant driver of economic
growth in the region, however, there is recognition
that the region’s rural economy is an important
contributor to growth of incomes in the City. This
interdependence will be recognised in the review
of the Regional Economic Development Strategy.
This City strategy is the first step in defining the
City’s contribution to the region’s future economic
prosperity. The regional strategy will identify, define
and further cement the economic linkages between
the City and the region.
Current Situation
Palmerston North has experienced strong economic
growth since 2000 while changes in social indicators
for the City, such as recorded crime, health outcomes,
registered beneficiaries and social deprivation, have
also been positive. Longer-term population growth
in the City has been weaker than the average for
New Zealand but employment growth and growth in
earnings by employees have matched national growth
levels. Longer-term projections of future population
growth suggest Palmerston North is likely to grow
more strongly than similar sized cities. The ‘Long-term
Projections for Palmerston North’ report contains the
detailed analysis that produced this information, but
in summary we know that:
In 2007 the GDP of the City was estimated to be $3.3
billion. In February 2010 there were 46,660 people in
employment. The biggest employment sectors are;
• health care and social assistance,
The Statistics New Zealand projections for
demographic change from 2006 to 2031 suggest
significant change is ahead for the City, including:
• The current population of 80,000 is expected to
grow to 94,000 by 2031.
• Our population is aging but not as quickly as
other parts of New Zealand.
• Proportionately there will be significant increases
in the Maori, Pacific Island and Asian populations
living in the City.
• The average household size is set to decline from
2.6 to 2.3 people.
• One-person households will account for 31% of
households in 2031 compared with 24% currently.
• There are expected to be 9,300 additional
households in the City by 2031.
• Employment is projected to rise by 19,900 (43%
increase).
• Key growth sectors over the next 25 years are
likely to be;
• health care and social assistance,
• retail trade,
• logistics - wholesale trade, transport, postage
and warehousing,
• professional, scientific and technical services,
and
• education and training,
• retail trade,
• public administration
defence),
Latest figures have unemployment levels at 8.1%
(Manawatu-Whanganui region, December 2009
quarter), with a high concentration of 15 to 24 year
olds out of the job market. There were 1,121 people
on unemployment benefits in Palmerston North in
December 2009, with 39% of these in the 18 to 24 age
group. The City has a significant number of people
with a disability. In December 2009 1,944 people
in the City were receiving the invalids benefit, 2.3%
of national invalid benefits, while its share of the
national population is 1.9%.
and
safety
(includes
• logistics, and,
• construction.
In the year ended June 2009 total earnings by
employees in Palmerston North were $1.9 billion.
• public administration and safety
The education, research and defence sectors are not
likely to grow as fast as these key growth sectors but
they will still remain key sectors for the City economy.
The projected employment growth is 4,400 higher
than population growth over the same time period.
This will require a further increase in labour force
participation rates from within the City and an
increase in the number of people commuting to work
from outside the City.
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Palmerston North Economic Well-Being Strategy 2010
Economic Drivers
The UK based Improvement and Development
Agency has identified six key drivers that contribute
to improvements in economic prosperity. Each of
these drivers has been broken down into a number
of subheadings, offering a comprehensive approach
to driving increased economic prosperity. The drivers
are:
Driver One
Enhancing quality of life
Driver Two
Maximising connectivity
Driver Three
Raising skills and increasing
participation in work
Driver Four
Stimulating investment
Driver Five
Supporting priority sectors
Driver Six
Improving business performance
These drivers are the responsibility of local, regional
and central government, their agencies and
businesses themselves. The model is being used
to help focus thinking and actions on what is most
important for the Palmerston North economy. The
model allows for national and regional economic
issues to be considered within the context of a local
economy. The drivers have been reordered from the
original list, based on feedback from Councillors on
the priorities for action.
Vision Manawatu and Destination Manawatu have
been the primary organisations tasked with the
implementation of actions developed under previous
City economic development strategies. A concurrent
review of Vision Manawatu and Destination Manawatu
is also based on a wider scope for economic
development than previous economic development
strategies and is likely to result in changes in the roles
of both organisations.
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Palmerston North Economic Well-Being Strategy 2010
Drivers
Driver One: Enhancing Quality of Life
Sub-drivers
•
Strengthening the community
•
Improving the quality and supply of housing
•
Enhancing the quality of the City environment
and green space
•
Strengthening the competitiveness of the City
Centre
Current Situation
Research shows that quality of life is an important
factor in the decisions people make about where
they will work so can be important in attracting and
retaining skilled people in the City.
The 2009 City Images survey suggests there is a
growing difference between resident’s perceptions of
the City and the perceptions of people who have not
visited the City within the past five years. Increased
ratings compared with the previous survey in 2005
were recorded by residents for “being a city with good,
interesting jobs”, “being a progressive go-ahead,
vibrant city” and “being a likeable, friendly city”.
Palmerston North is a major shopping hub for the
southern North Island and is capturing an increasing
share of national retail turnover and retail employment.
Its closest competitors are Paraparaumu, Hastings
and Porirua. It is ranked 10th most visited place in the
country. District Plan Change 43 and the Urban Design
strategy will help to ensure the City continues to have
a vibrant and attractive central business district.
The City has 179 citywide and local reserves and sports
fields. The total area is 642 ha or about 8 hectares per
1,000 people. The City’s cultural facilities include
Te Manawa (City Museum, Art Gallery and Science
Centre), Regent on Broadway, Globe Theatre, Creative
Sounds, Square Edge, the Library, the Square and
the New Zealand Rugby Museum. The City Square
has won urban design honours in the 2009 Western
Architecture Awards. Te Manawa is set for a significant
refurbishment, along with the Globe Theatre. A
partnership of agencies is bidding to bring a national
cycling velodrome to the City.
The City hosts a number of top level sports teams
including the Turbos, the Jets, Young Heart Manawatu
and teams with a wider regional coverage such as
the Central Districts / Central Stags cricket team and
Central Pulse netball team. Plans are in place for a
new reserve as the City grows and funding is provided
in the LTCCP for improved indoor sports facilities.
The City has a mixed quality of housing stock with
26,723 houses, at an average sales value of $285,000
(QV, December 2009), well below the national
average of $404,671. Housing affordability is better
than in most regions but since 2003 house prices in
the City have increased faster than national house
prices. The private rental sector has been described
as robust, whilst Housing New Zealand, with over
1,200 properties, is by far the largest provider of social
housing in the City.
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Palmerston North Economic Well-Being Strategy 2010
Household projections prepared by Statistics New
Zealand suggest that half of the projected City
household growth between 2006 and 2031 will be
single person households. However, the average floor
area for residential building consents has increased
from 142m2 in the year ended June 1991 to 220m2
in the year ended June 2009, an increase of 78m2
(49% increase) even though the average number
of occupants per household is reducing. Consents
for just 200 apartments were approved between
1991 and 2009, mostly in retirement villages in the
City. A housing needs assessment is taking place to
understand future housing demand better.
The Not-for-Profit Sector Profile for Palmerston North
identified that the community sector was a significant
contributor to GDP and employment in the City. There
are an estimated 1,758 not-for-profit organisations
in the City, with total employees of 3,083 and an
estimated direct contribution to GDP of $105 million
(Council estimates). Ascribing an economic value to
the voluntary labour contributed to not-for-profit
institutions adds a further $95 million to estimated
economic activity in the City (based on an estimated
7.8 million volunteer hours in the City). The City
Council is in the process of developing Community
House, affording the opportunity for voluntary and
community organisations to share accommodation,
thus reducing their overheads and increasing their
joined-up work.
In September 2009 21.5% of Palmerston North
children aged under 15 years were dependant on
recipients of an MSD benefit.
Support services for migrants assist the families and
particularly spouses of employed migrants to find
meaningful work in the City and to feel accepted in
the community.
Analysis
Skills shortages in the City and the difficulties some
business have had with attracting new staff to the
region identified the importance of quality of life
factors in assisting in the growth of the City. The
City Images survey has also identified a widening
difference between the image of the City by residents
and its image among visitors and people who have
not visited the City within the past five years.
The City appears to have a strong and vibrant voluntary
and community sector, but further work needs to be
done to identify its strengths and weaknesses. There
is no obvious picture of the level of corporate social
responsibility undertaken by the private sector.
The Sustainable City Strategy will identify the most
effective way forward for the community sector.
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Palmerston North Economic Well-Being Strategy 2010
There is adequate private and rented housing in the
City at the moment and there are a range of social
housing providers. The City Council’s Residential
Review will create housing zones that will identify an
additional 175 ha of land to create up to 1,800 new
homes. A housing needs assessment is underway that
will identify how we can ensure the City has the right
size and type of housing for its future generations.
The District Plan and Urban Design reviews offer the
City Council the opportunity to consider changes
which can encourage increased housing density
while enhancing the quality of housing.
The City has excellent parks and reserves, with
immediate local access to open space in the
mountains. Work needs to continue to ensure a wider
biodiversity within the City and its environs in the
future. This is being addressed by the Sustainable
City Strategy. Similarly, for a regional city, Palmerston
North has excellent cultural and leisure facilities.
Further new facilities, improvements and upgrades
are identified in the outdoor recreation strategy, arts
strategy and indoor recreation strategy.
The City’s retail sector has recovered quickly from
the recession. District Plan Change 43 is intended
to consolidate the City centre as the prime focus for
retail activity. Support for the retail sector is identified
in the Supporting Priority Sectors driver.
Summary of Actions
Change being sought
Actions
What success will look like
Palmerston North’s neighbourhoods
and communities are stronger and
more resilient
Development of a social strategy as part of the
Sustainable City Strategy
Reductions in social deprivation
indicators
Department of Internal Affairs, Ministry of Social
Development, other social agencies and nongovernment organisation programmes
Increased participation in
community activities
Affordable, healthy housing is
available for all
District Plan review
Housing affordability improves
relative to national indicators
Urban Design Strategy
Median rents increase more slowly
than national indicators
The quality of rental accommodation
improves
Urban population density has
increased
The City provides a high quality
environment and green space
Outdoor Recreation Strategy
Indoor Recreation Strategy
Urban Design Strategy
The City has a vibrant and attractive
central business district and
suburban shopping centres
Plan Change 43 amendments to the District
Plan
Parking strategy
Promotion of the cultural precinct concept
through the District Plan
Urban Design Strategy
The City supports access to cultural
institutions and visitor attractions
Arts Strategy
Visitors strategy
Active recreation increases for City
residents
Surveys of ratepayers show a high
level of satisfaction with recreation
facilities, parks and reserves
Surveys of ratepayers show a high
level of satisfaction with services and
safety in public spaces
Increased development and
promotion of visitor and cultural
attractions to residents, workers and
visitors
Increased number of arts and
cultural activities in the City
Urban Design Strategy
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Palmerston North Economic Well-Being Strategy 2010
Driver Two: Maximising Connectivity
Sub-drivers
• Improving transport and accessibility
• Improving local, regional and international
connectivity
• Improving communications infrastructure
Current Situation
Good communications infrastructure is critical for
any city. Not only do people expect to get around
quickly and easily, but advances in technology
mean that modern cities of the future will have
ultrafast broadband connections to allow greater
workplace flexibility and speedier transfer of business
information. Residents will expect to live in cities
where they can access Voice over Internet Protocol
(VoIP) based communications, digital TV and instant
internet access.
The City Council manages 472 kms of roads, 505 km
of footpaths and 65 bridges as well as the associated
street lighting and car parks. The current value of
these assets is $372 million. Council investment of
$173 million is planned over the next 20 years, based
on a projected average annual population growth of
0.7%.
Palmerston North is less than two hours drive from
Wellington, two hours from the Hawkes Bay, and two
and a half hours from New Plymouth. Hence transport
and warehousing is one of the faster growing sectors
in the City, with significant businesses in product
warehousing and distribution, road freight, rail and
air services. The National Land Transport Programme
2009-2012 for the Manawatu-Whanganui region notes
that as the largest centre in the region, Palmerston
North remains a key focus of planning for growth.
The New Zealand Transport Agency is committed to
supporting industrial and commercial development
around Palmerston North with a roading network that
serves these developments. Work is also planned to
explore the future need for a rural ring road around
the City.
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Palmerston North Economic Well-Being Strategy 2010
Increasing energy costs and the inevitability of
demand for oil exceeding supply means urgency
needs to be given to actions which will reduce the
region’s dependence on fossil fuels to ensure the
security of future economic development. Numerous
reports have attempted to predict future oil demand,
with a range of different scenarios suggested. The
Ministry for Economic Development suggest that
retail petrol and diesel costs will increase by anywhere
between 2% and 18% between now and 2015, whilst
other suggestions are of a much greater increase in
prices.
Currently a low proportion of road user funds
collected from road user charges and petrol taxes
in the region are reallocated to roading and public
transport projects in the region. The National
Land Transport Programme (NLTP) will allocate an
estimated $7.3 billion for roading infrastructure and
transport initiatives between 2009 and 2012, of which
$282 million is allocated to the Manawatu-Whanganui
region, 3.9% of total funding (the region has a 5.3%
population share). The region ranks 13th (out of 14
regions) for per capita roading infrastructure and
transport initiatives expenditure, 10th for expenditure
as a share of regional GDP, 14th for expenditure as a
share of travel km, 10th for expenditure as a share
of State highway length and 8th for expenditure as
a share of local road length. However, the City will
benefit from the upgrade to SH1 from Wellington
through to Levin, reducing the driving times from
Wellington.
An effective public transport system is fundamental
to any city and Palmerston North is no exception. The
local bus service operates on a ‘spoke and hub’ model.
The frequency of bus services during peak times has
been increased from once every 35 minutes to once
every 20 minutes. Approximately 85% of the City’s
urban population has a bus stop within 400 metres, (5
minutes walking distance) of their house. Bus usage
data shows passenger growth of 10% over the last two
years (to December 2009) years for City services, aided
by Massey University and UCOL support for free travel
for students and increased urban bus use. However,
waiting times are still longer than is desirable for
an effective public transport service and the service
to the industrial zones is poor. Implementation of
plans for a new bus terminal will enhance bus usage,
although external funding has still to be secured.
Although the City is a regional hub for bus services
across the country the commuter bus connections to
the adjacent commuter zones of Feilding, Bulls, Otaki,
Shannon, and Woodville are limited to 10 services per
day to Feilding, one service a day to Marton and one
service to Levin.
The City has the potential to be the cycling capital
of New Zealand. Its flat geography, wide roads and
compact structure make cycling a real option for
many residents. The health benefits of cycling are well
recognised.
The Wellington commuter rail service from Palmerston
North, which crosses from one regional council area
into another, does not currently receive any passenger
subsidies. The service only provides one service per
day and there is currently some uncertainty over its
future.
The airport is recognised by Horizons’ Regional
Transport Policy Statement as a ‘physical resource of
regional and national importance’. It has 10 flights
daily to Auckland and a comprehensive range of
flights to other regional centres. International flights
connected the City directly to Australia until March
2008 and there is a concerted effort to restore such
a service. The airport has a catchment of 288,000
people within a 60 to 70 minute drive* and there
are compelling arguments that there remains a
strong business case for trans-Tasman services. The
provision of an international link to Australia from
Rotorua demonstrates that regional cites can provide
international services. The intended improvements to
Paraparaumu Airport will reduce customer demand in
Palmerston North on some regional flights.
There are numerous different providers of broadband
in the City, but only a few pockets of the City have
access to ultra-fast broadband (100Mb/sec). The
Council is keen to keep cabling underground. The
government are currently reviewing the best way to
invest $1.5 billion in ultrafast broadband across the
country.
Analysis
The City has an excellent central location, with
connectivity a key factor in the City’s prosperity.
The anticipated rises in fuel prices will create
opportunities and challenges for the City’s economy.
Sustained high prices for petrol and diesel are likely
to motivate gradual but sustained shifts in travel
and land use patterns, characterised by an increase
in alternative transport modes and denser land use
patterns. Completion of the rural ring road will reduce
city centre congestion, allowing a more pedestrian
friendly city to be created.
Improving the current public transport set-up is a
high priority for the City. An enhanced bus service
would build on the strengths of the existing road
network, providing a flexible framework that would
meet economic, environmental and social needs.
Proposals to develop an eco-friendly public transport
system are contained in the Sustainable City Strategy.
An enhanced bus terminal will add value to the City’s
future public transport infrastructure
Improving strategic roading networks within the
region and improved rail freight services are also very
important to ensure Palmerston North maintains its
position as a major regional city in New Zealand.
The City receives less than a proportional share of
NLTP funding. This is limiting potential improvements
to public transport frequency and resulting in delays
in improvements in the strategic roading network in
the City and region.
The City needs a strategic analysis of the potential for
the railway line, rail station and associated goods yard
as a key facility for the City and sub-region.
The airport offers significant potential for economic
growth by increasing the number of visitors to the
City and encouraging businesses to relocate to the
City. In addition, the reintroduction of international
flights will reduce the costs of overseas holidays for
local residents and offer improved international
connections for new migrants. However, any
expansion of the airport needs to take into account
RMA restrictions on noise impacts for residents.
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* Whanganui, Rangitikei, Manawatu, Tararua, Horowhenua, Kapiti Coast and
Masterton Districts and Palmerston North City
Palmerston North Economic Well-Being Strategy 2010
Accessing ultra-fast broadband will improve business
efficiency and enable more home-based working. A
modern city that attracts new people, particularly
new migrants, will need ultra-fast broadband. VoIP
is an example of a new technology using broadband
that allows for the routing of phone calls over existing
data networks to avoid the need for separate voice
and data networks. Improved broadband speed will
enhance quality of life by increasing access to digital
TV and internet based services for households and
faster data transfer for businesses.
This is particularly important for the enhancement
of a knowledge based economy and sectors such as
research and development. Improving broadband
speed is an element in attracting international
migrants and students to the City and attracting
staff in areas where skills shortages are still being
experienced.
Summary of Actions
Change being sought
Actions
What success will look like
Transport flows around the City more
efficiently
Outer ring road is completed
Businesses reduce costs. More
businesses are attracted to the
City because of transport links and
infrastructure
The proportion of local road user
funding spent in the region increases
from 60% to 80%
Strategic roading network plan
Strategic roading network
improvements in the region are
progressed more quickly
A sustainably powered public
transport service operates in the City
Case accepted by central government to
reallocate funding
Sustainable City strategy identifies public
transport plan
Public transport systems are better
funded
Annual bus passenger trips increase
to more than one million by 2012
Local bus service frequency increases
to 15 minutes
The maximum walking distance for
all urban residents to bus stops is
400 metres
Reduction in greenhouse gas
emissions for public transport
services
More people walk and cycle to get
around the City
Regional bus services are improved
for commuters, shoppers and people
accessing health, education and
other services in the City
Sustainable City Strategy will identify the need
for the active transport strategy to be reviewed
in 2012
The proportion of people cycling or
walking to work increases
Urban Design Strategy
City greenhouse gas emissions
decrease
Parking strategy
Land use is improved in the City
New bus terminal is completed by 2012/13
Improved connection between
domestic and regional services
Bus services align with working hours for
regular and shift workers
Annual bus passenger trips increase
Improved frequency of inter-regional bus
services
More people use rail services to get
to and from the City
Full cost benefit study is made to examine
options
Passenger rail trips increase
Maintain the frequency of domestic
flights to Auckland and Christchurch
Airport attracts and retains suitable domestic
air services
Current frequency is maintained or
increased
International flights recommence to
and from Palmerston North
Airport attracts suitable international air
services
Regular international flights to and
from the City
Broadband infrastructure completed
across the City
Full use of government broadband funding
All businesses, institutions and
households have access to
broadband at 100 Mbps
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Palmerston North Economic Well-Being Strategy 2010
Driver Three: Raising Skills and
Increasing Participation in Work
Sub-drivers
• Addressing barriers to work
• Improving basic skills and employability
• Encouraging
local
recruitment
development opportunities
and
• Raising educational attainment and higher
skills levels
• Supporting workforce development, including
the volunteer sector
Current Situation
Employment in the City has increased by 8,600 jobs
in the last nine years (23% increase) while the City
population has increased by 5,200 people. Employee
earnings in the City increased by 70% between 2000
and 2008, matching national growth of 72% over the
same period.
The number of people registered for the
unemployment benefit has varied from 439 people
in December 2007 to 1,121 in December 2009. The
total number of people receiving any type of benefit
has increased by 1,284 (24%) over this time (the
beneficiary data does not include recipients of New
Zealand Superannuation). Young people have been
particularly affected by the recent recession with
currently 371 young people (18 to 24 age group) in
the City registered unemployed. This compares to the
115 people in this age group two years ago. While
school leaver numbers declined between 2008 and
2009, in response to the economic recession, school
leaver qualifications data suggest there was little
change in the number of school leavers without any
qualification, increasing their proportion of total
school leavers in the City.
The Ministry of Social Development (MSD) skills
shortages survey was discontinued in 2008 and has
only recently been replaced by a new series with data
from September 2009. It will be at least a year before
useful trend information is available from the new
series. However, some businesses still continue to
report difficulties attracting skilled staff despite the
significant increase in unemployment over the last 18
months. The earlier skills shortages survey showed
significant difficulty in filling vacancies, even in
relatively low skilled positions such as care assistants
and retail positions.
School leaver attainment statistics for 2007 and 2008
show the City lags slightly behind national attainment
levels. Maori attainment levels in the City are better
than the national averages for Maori but the results
for European/Pākehā in the City are lower than the
national average. Improving attainment levels is a key
national goal and requires high levels of coordination
between schools and support agencies in the City.
The Vision Manawatu business retention and
expansion survey of Manawatu businesses in 2008
identified that only 30% of businesses had conducted
a formal training needs analysis for their organisation
where they have assessed the future training needs
for each position. However high levels of training
opportunities were offered to their employees.
Level of training available for each employee
On-the job training
96% of businesses
External courses
70%
Workshops/seminars/conferences
58%
In-house courses
46%
Apprenticeships
33%
Polytechnic courses
27%
University courses
15%
Online courses or e-learning
13%
Only 2% of employers did not offer any training in
the last year while 37% offered 20 or more hours of
training each year.
Annual hours of training for each employee
0 hours
2%
1 to 10 hours
28%
11 to 20 hours
33%
21 to 30 hours
15%
31 hours and over
22%
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Palmerston North Economic Well-Being Strategy 2010
Analysis
MSD funding has been provided for three years for the
development of a Manawatu Region Labour Market
Strategy through Vision Manawatu. A facilitator has
been employed to develop an effective labour market
network consisting of community representatives,
businesses, training providers, education institutions
and government agencies within the Manawatu.
MSD is the key agency which works with beneficiaries,
assisting them to become ready for employment.
Youth Transition Services, which is funded by MSD, is
an example of one of the agencies which work with
young people needing training and employment
support. The Youth Taskforce is currently coordinating
efforts to increase employment of young people. The
Trades Connections programme, which is currently
delivered through Vision Manawatu, assists with
encouraging students to consider technology
and trades career paths and links businesses with
apprentices and young people interested in careers
in the trades.
Palmerston North is well placed with a wide range of
tertiary providers located in the City (20 registered
tertiary providers and a number of significant
Industry Training Organisations (ITOs)).
Recent
changes in central government funding policies are
creating some uncertainty over future growth in
student numbers, with the cap on funding limiting
the ability of tertiary institutions to respond to higher
enrolments as a result of the 2009 recession. There
were just over 10,000 full-time equivalent tertiary
students in the City in 2008.
The Integrated Education Guardian Group is
funded by Council and offers opportunities for
joint marketing by schools and tertiary education
providers to international students and improved
linkages between schools and post-school education
and training providers.
Summary of Actions
Change being sought
Actions
What success will look like
Barriers to work are effectively
addressed
Improved data on benefit take up and
employment growth in the City
Unemployment benefit levels are
lower than the national average
Migrants are assisted to access childcare,
language training and employment placement
services
High workforce participating levels
among recent migrants
Basic skills and employability are
improving
Adult education providers offer basic skills and
employability training
Average wage rates for City residents
are improving compared with
national wage rates
Young people move readily from
school to work and training
Local employers are effectively linked with
secondary schools
Skills shortages in the City are
reduced
Youth Taskforce delivers on aspirations
Youth unemployment decreases
Improved linkages between schools and postschool education and training providers
Educational attainment is increased
Maori educational attainment is addressed
through the Maori Economic Development
Strategy
Manawatu Labour Market Strategy
NCEA achievement levels are
increased
Maori NCEA achievement levels
increase faster than for the general
population
The proportion of people with postschool qualifications increases
The proportion of Maori with postschool qualifications increases
Workforce development is
encouraged
Training programmes encourage businesses to
focus on skills development and training
The proportion of people with postschool qualifications increases
More international students are
attracted to the City
Promotional activities to international students
and visitors are undertaken
International student numbers
increase from 1,200 FTE
Tertiary education businesses in the Manawatu
are enhanced
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Palmerston North Economic Well-Being Strategy 2010
Driver Four: Stimulating Investment
Sub-drivers
• Develop and promote sites and premises
• Develop trade and promote access to markets
• Manage public assets to support economic
growth
• Coordinate social infrastructure investment
• Undertaking branding and marketing
Current Situation
The District Plan identified that in 2006, 6% of the
City was zoned for commercial and industrial activity.
Faster than expected uptake of industrial land use
has resulted in a review of the land currently available
in the North-Eastern Industrial Zone. The need for a
further 105 ha to be added to the existing zone (45
hectares within the Palmerston North city boundary
and 60 ha in Manawatu district) is subject to a joint
study by Palmerston North City Council and Manawatu
District Council. As at December 2008 73 ha of the 95
ha existing North-Eastern Industrial Zone was vacant.
The fringe business zone provides sufficient capacity
for large format retailing for the foreseeable future.
The research and innovation hub around the Massey
campus, including the recent food hub is an excellent
example of how clustering activities can bring shared
benefits.
New Zealand Trade and Enterprise is the primary
funder of programmes to assist the development
of competitive export businesses in the City and
provides information on potential markets. Some
of these programmes are delivered through Vision
Manawatu and others directly through the Palmerston
North office of New Zealand Trade and Enterprise
(NZTE). NZTE currently spends over $2 million a year
in the City and wider region supporting business
development and exporting. Vision Manawatu has
been successful in bringing significant Foundation
of Research, Science and Technology (FoRST) grant
funding to businesses in the region.
In addition to the roading infrastructure identified
earlier the City has significant investment in water
supply systems and waste treatment facilities.
The Council annual budget for new capital investment
and asset renewals is $38 million. The Council has
Asset Management Plans in place for all its facilities
and infrastructure to ensure there is effective
maintenance, repair and replacement of all physical
infrastructure. Plans are in place to develop a rural ring
road to enhance the City’s transport infrastructure.
The Bio Commerce Centre established the Manawatu
Investment Group in 2007 to be active in seed-stage
investment in the Manawatu region. The Manawatu
Investment Group considers investment propositions
where there is potential for a relationship beyond
the capital investment (an active investment), proof
of technical feasibility and product development is
advanced and there is a clear market opportunity.
The Council has identified further investment in
its leisure and cultural facilities as well as the City’s
social infrastructure with the plans to develop the
Community House. The establishment of a Social Well
Being Forum in 2007 identified key issues for the City
as safety, transport, youth, housing and support for
service providers.
Palmerston North has achieved strong economic
growth since 2000 but there still appears to be limited
awareness by businesses, central government and
local residents of the strength of growth of the local
economy or the size of the economic base of the City.
A Council City Marketing Strategy was approved in
October 2007 but implementation of the strategy
has been limited due to the withdrawal of funding
in the 2009/19 LTCCP. The 2009 City Images survey
suggests the perception of Palmerston North by City
residents has improved but there has not been any
improvement in how the City is perceived by people
who have not visited the City recently.
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Palmerston North Economic Well-Being Strategy 2010
Analysis
Resolution of the boundary constraint with Manawatu
District Council in the North East Industrial Zone will
release significant areas for new commercial and
industrial investment.
Vision Manawatu was the pioneer of the Smart
Business Acceleration course, which started in 2003
and is funded by New Zealand Trade and Enterprise
(NZTE). An evaluation of the course established that
it had been valuable in supporting stronger growth
in the 70 businesses which have been through the
course locally.
The City Council has identified its infrastructure
needs for the next 20 years based on 0.7% average
annual population growth. Further work will need to
be done in the 2012 – 2022 LTCCP to take account of
increases in vehicle fuel prices, reduced second-hand
vehicle imports, an increase in public transport usage
and reduction in parking availability.
Improved marketing of the City is still required to
attract new businesses to the City and increased
migration of people to the City to meet skill shortages.
Across New Zealand councils have not been perceived
as business friendly, with the Business New Zealand
– KPMG Compliance Cost Survey consistently rating
local authorities among the least helpful government
organisations. The survey is too small to provide
adequate data to allow for a comparison of Palmerston
North with other Councils. The Council Business
Friendly Plan aims to increase the understanding
of Council staff of the needs of businesses and the
opportunity for the Council to facilitate high quality
development in the City.
Summary of Actions
Change being sought
Actions
What success will look like
Sufficient land is available to meet
industrial and commercial demands
over the next 50 years
Discussions on North East Industrial Zone are
completed
An increase in the number of
businesses and employment
City businesses expand into new
markets regionally, nationally and
internationally
Training, information and support is available
for businesses seeking to expand into new
markets
Plan Change 43 to the District Plan is
implemented (inner and outer business zones)
An increase in the number of
businesses and employment in
export oriented sectors
Businesses are able to access central
government business training and research and
development funding, business networks and
trade collaboration
Roading, water and sewerage,
electricity and telecommunications
infrastructure is responsive to
increased demand and sustainability
issues
Asset management plans reflect long-term
growth projections for the City
Development contributions are reviewed every
three years to ensure contribution levels remain
appropriate
Electricity and telecommunications lines
companies are well informed on growth rates
and growth projections for the City
Infrastructure is responsive to
population and economic growth in
the City
The social, cultural and recreational
infrastructure meets local needs
Social strategy, outdoor recreation strategy,
indoor recreation strategy, arts strategy are
implemented
Residents believe that there are
places to go and things to do
Effective communication with local
businesses and employers and
potential investors
Improvements in the level of Council contact
with the business sector through business
friendly forums and other forums and regular
contact with individual businesses
An increase in the proportion of
businesses which consider the
Council is business friendly
Regular communication of data on economic
trends in the City
16
An increase in the proportion of
developers who consider the Council
is business friendly
The potential economic development
contribution of Council initiatives is identified in
Council strategy documents
Palmerston North Economic Well-Being Strategy 2010
Vulnerable people are supported
An increase in the number of
businesses receiving the Manawatu
Monthly Economic Update and
Manawatu Economic Outlook reports
Driver Five: Supporting Priority Sectors
Sub-drivers
• Developing growth sectors and established
clusters of firms
• Promoting not-for-profit enterprises
• Developing networks, inter-firm trading and
supply chains
• Promoting procurement opportunities
Current Situation
The development of sector profiles by the City Council
has helped increase understanding of the local
economy and the sectors which will contribute more
to economic growth in the future. Major employment
sectors (by industrial classification) in the City are:
Major sector
Employee count
(Feb 2009)
Employee
earnings (year
to June 2008)
$ million
Education and Training
5,900
275
Health Care and Social
Assistance
7,030
245
Public Administration
and Safety (including
defence)
4,850
223
Retail Trade (including
accommodation and
food services)
7,930
202
Logistics (wholesale
trade, transport, postal
and warehousing)
4,520
183
Construction
3,490
162
Professional, Scientific
and Technical Services
2,690
132
Manufacturing
2,980
129
Administrative and
Support Services
2,160
59
Other Sectors
5,003
178
Total
46,553
1,788
Employment in health care and social assistance
increased by 38% between 2000 and 2009,
contributing nearly one quarter of the employment
growth in the City. Strong growth is expected in
the sector due to ongoing growth in spending on
health services, some consolidation of specialist
services from neighbouring district health boards and
increased aging of the population. It is not expected
that there will be significant increases in employment
in the education or defence sectors, although their
contribution to the City will still be vital, particularly
through the migration of young people to the City.
The research and development sector has been
identified as a significant part of the City’s economy,
with an estimated 2360 full-time equivalent (fte)
jobs and 5.9% of total salaries paid in the City in
2008. The sector cuts across the industrial sector
classification, with significant numbers of employees
in the education and the professional, scientific and
technical services sectors. It is anticipated that the
research and development sector will grow, with
increased collaboration between research institutes,
growth in the Massey University post-graduate
programme and continuing growth in business R&D
investment.
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Palmerston North Economic Well-Being Strategy 2010
The Bio Commerce Centre and Vision Manawatu play
key roles in ensuring more of the new technology
developed in Palmerston North is commercialised
locally, creating employment opportunities in sectors
such as agriculture, manufacturing and information
and communications technology. The development
of “green technology” is a real possibility as the City
seeks to develop itself and its image as a sustainable
City.
Other important growth sectors for the City include:
Logistics - the freight and distribution sector has been
an important contributor to employment growth in
the City, and has been expanding significantly faster
than national growth rates in the sector.
Visitors - the City was ranked as the 10th most visited
centre in the country and has experienced strong
growth in the number of overnight visitor nights.
Retailing and Business and Professional services - the
City has a 2.6% share of national retail sales and has
experienced an increase in this share in recent years.
The Sustainable City Strategy will identify the need
for the City to have robust not-for-profit enterprises
(which also covers a range of activities across the
industrial classification), including providers of
social services and community-based environmental
activities.
Networks for the defence, education, tourism and retail
sectors are already established. The physical clustering
of a number of the Crown research institutes, joint
venture research institutes and commercial research
centres around Massey University has contributed to
the creation of the food science hub in the City. These
networks assist with the sharing of knowledge and the
development of contacts in key markets. Formation
of clusters assists the provision of specialised support
for the businesses participating in the cluster. Informal
clusters also exist for other sectors such as the call
centres based in Palmerston North. Encouraging use
of local products and services helps keep money in
the Manawatu and has been promoted proactively
by the Manawatu Chamber of Commerce member
discounts scheme and the development of a discount
scheme for defence personnel.
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Palmerston North Economic Well-Being Strategy 2010
Analysis
With a major regional public hospital, two private
hospitals and strong ancillary health services the City
is well placed to develop its health sector provision.
The education and defence sectors are not expected
to grow as strongly as other sectors but play an
important role in bringing people to Palmerston
North and will continue to be significant contributors
to the City economy for the foreseeable future. They
are however subject to change of government policy
and the City needs to keep a watchful eye on how
government changes can impact on the City.
The City’s central location suggests that the transport
and warehousing sectors will continue to grow
strongly as the merits of distribution of products from
Palmerston North are increasingly recognised.
Other sectors are likely to also experience growth
in employment but this growth will mostly be in
response to increased population and employment in
the City.
This means that the priority sectors will be health and
social care (such as retirement villages), education,
defence, logistics (warehousing and transport),
research, and retailing and business services.
There is room for improved networking and skill
sharing within these priority sectors and opportunities
for additional clusters to support growth in the
priority sectors.
Summary of Actions
Change being sought
Actions
What success will look like
Priority sectors are developed and
enhanced
Business utilises specialised business support
and information
Growth in health, logistics
(warehousing and transport),
research and development, retail
and business services, education
and defence and their associated
industries
Support networks of businesses in priority
sectors
Links between research institutions and priority
sectors
City actively recruits new business in priority
sectors
New businesses are relocating to the
City
The District Plan and transport strategies
support the growth and retention of key
industries
Not-for-profit enterprises are a key
part of the City
Social strategy
Growth in not-for-profit enterprises
in the City
Improved networking , skill-sharing
and inter-firm trading
Expansion of the use of the Chamber of
Commerce member discount scheme model
The number of businesses
participating in networking and
sharing opportunities increases
Events and programmes to market and promote
local supply chain takes place
Links between business and higher education
institutions support technology transfer,
exploitation of research and graduate skills
Increased inter-company trading
Trade Fairs and information sharing networks
take place
More companies utilise Manawatu
companies in their supply chain
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Palmerston North Economic Well-Being Strategy 2010
Driver Six: Improving Business
Performance
Sub-drivers
• Increasing business formation and survival
• Encouraging
productivity
innovation
and
improving
• Increasing environmental sustainability
• Developing new markets
• Supporting and retaining key firms
Current Situation
In February 2009 there were 7,316 active enterprises
in the City. Employment in Palmerston North is more
strongly concentrated in large institutions, with 42%
of the City’s workforce employed in institutions with
100 staff or more compared with 30% nationally.
Conversely, only 55% of Palmerston North businesses
do not employ staff compared with the national
proportion of 65%. There has also been a slower
increase in the number of these small businesses than
nationally (18% increase between 2000 and 2009
in Palmerston North and 30% increase nationally).
In the last eight years the City has seen 7,362 new
enterprise “births”, and 6,105 enterprises “deaths”.
Most enterprise “deaths” involve few employees, with
6,102 jobs lost between 2001 and 2009 as a result of
the 6,105 enterprise “deaths”.
The City has a robust research and development
sector and funding is provided by Council to assist
the Bio Commerce Centre to encourage innovation.
The Centre raises money and injects cash into local
technology businesses, provides support and business
mentoring to start-up and early-stage companies
and solves industry problems by transferring new
technologies from the lab to the marketplace.
Information is not available on the environmental
sustainability of City firms. Toyota is an international
leader in developing and using green technology in
its processes while the Herb Farm won the national
‘Small & Medium Business Trailblazer’ Award at the
NZI Sustainable Business Awards. Massey University
aspires to establish a School of Environmental
Sustainability. The volume of City recycling has
increased and petrol sales volumes have changed
little over the last 12 years, despite strong growth in
employment and moderate population growth over
that period.
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Palmerston North Economic Well-Being Strategy 2010
New Zealand Trade and Enterprise is the primary
funder of support that encourages companies to work
collectively to identify new markets and also funds
business training programmes. Lean manufacturing
initiatives involve minimising input costs such as raw
materials, energy and labour and minimising waste
and inefficient processes and systems. This leads to
reduction in direct costs (including raw materials and
stock), rework and reduced warranty claims and leads
to improved worker output and satisfaction.
The Council provides financial support for
International Education Manawatu and Destination
Manawatu, which coordinates tourism marketing
for its members. The City has a formal Sister-City
relationship with Missoula, Montana in the USA and a
Friendship-City relationship with Guiyang, the capital
of Guizhou Province in the People’s Republic of China.
The City Council supports sports and cultural events
in recognition that these activities bring visitors
to the City, and so supports the retail, commercial
accommodation and entertainment sectors.
Recently, the Council has responded to government
consultations on the tertiary education and defence
sectors to ensure the government understands the
critical importance of these sectors. The development
of sector profiles has helped highlight the significance
of different employment sectors to the City, allowing
agencies to build economic and social arguments to
keep services in the City.
Analysis
Palmerston North is a city of large companies and
public institutions but there are still remarkable
examples of entrepreneurial success in the City. The
high level of government employment has given the
City an increased level of stability during economic
cycles but it also means the City could be damaged
by a small number of key firms closing, or being
negatively affected. The City is still dependant on the
education sector but its share of the city economy is
declining due to above average employment growth
rates in other sectors.
With a vibrant R&D sector, the City is placed to
encourage innovation and improve productivity,
particularly within the agriculture, food processing
and machinery sectors. However, greater focus needs
to be made on moving research into commercial
opportunities locally.
There is significant potential for Palmerston North to
be identified as a ‘Sustainable City’, with a resultant
in-migration of workers seeking a more sustainable
lifestyle (environmentally and financially) and the
possibility of developing green technology and green
networking hubs.
Identifying and supporting key firms will have
significant benefits for the City. The development of
sector profiles that articulate the social and economic
benefits of particular sectors allow an overview that
identifies common issues which are limiting economic
growth in the City and specific actions which the
Council can take to support growth in individual
sectors.
Summary of Actions
Change being sought
Actions
What success will look like
More businesses which employ staff
are created
Coordinated provision of information and
support for small businesses and not-for-profit
organisations
Business “births” are higher in
number than business “deaths”
Businesses work in partnership with schools
and tertiary providers to encourage young
entrepreneurs
Businesses are more innovative, with
enhanced productivity
Employment increases
Active links between research institutions and
local business
Increased commercialisation of
research locally
High levels of workforce development
Percentage of workforce with no
qualifications reduces
More businesses introduce lean
manufacturing / productivity
improvements in their business
Initiatives to promote business and productivity
improvement will be encouraged / supported
Increased number of businesses
will implement productivity
improvement activity
Businesses are environmentally
sustainable
Business advice on reducing pollution, energy
consumption and waste
Increased energy efficiency by local
businesses
Local businesses understand and identify
market opportunities to exploit advances in
environmental technologies
New markets are developed
Links to international markets are enhanced
Provision of market research and specialist
expertise for clusters of exporters and
international education providers
Increased number of manufacturers
involved in exporting
Existing businesses and entrepreneurs can
find advice and support when thinking about
entering new markets
Support and retention of key firms
The top 100 firms / institutions are identified
that are vital to the local economy
Collaborative culture between
businesses and Council
Regular meetings are held for senior business
leaders hosted by the CEOs of Vision Manawatu,
Destination Manawatu and the Council
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Palmerston North Economic Well-Being Strategy 2010
Economic Well-Being Monitoring
The City Council already produces quarterly economic
reports on behalf of Vision Manawatu and Destination
Manawatu. The information collected in these reports
will continue to be circulated to key agencies within
the City. The reports will be available for sector clusters
to focus their efforts on building on the strengths
of the local economy. This information, along with
Vision Manawatu business surveys will be used to
inform the Council’s priority actions as it develops its
Long Term Council Community Plan. It is anticipated
that the development of a new regional economic
development strategy will afford the opportunity to
check the aspirations of the City strategy are on-track.
The City Council will undertake a formal review of
the City economic well-being strategy two years
after the strategy is approved. The focus of this
review will be to:
• report on progress on implementation of the
strategy, and
• to assess whether any changes are required to
better align the strategy with the new regional
economic strategy.
The major three-yearly State of the City report by
Council will be produced around October of each
election year (local body elections) and will offer a
comprehensive overview of economic, social, cultural
and environmental trends in the City.
Annual updates to the State of the City report will
focus mostly on exceptions to the trends identified
in the 3-yearly report so will provide a regular
monitoring report on the City.
The Long-term Projections for Palmerston North
report provides a more detailed overview of
employment trends in the City and will also be
updated annually using annual updates to Statistics
New Zealand employee count and employee earnings
data for the City.
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Palmerston North Economic Well-Being Strategy 2010
Palmerston North Economic Well-Being Strategy 2010
Palmerston North City Council
W pncc.govt.nz | E [email protected] | P 356 8199 | Private Bag 11034, The Square, Palmerston North, 4442