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Infometrics November newsletter
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November 2017
NEWSLETTER

New Zealand’s coalition government has been in power for just over a month, and our new Prime Minister is making headlines around the world.

Back at home, the realities of steering New Zealand’s economic future are hitting home. Andrew Whiteford looks at how a cut in migration may negatively affect regional growth.

Benje Patterson and Brad Olsen both examine the new government’s Regional Development (Provincial Growth) Fund and how local authorities can get their hands on it.

Gareth Kiernan responds to feedback on our latest Construction Forecasts with a new model that more explicitly accounts for supply constraints. He outlines what effect this will have on the government’s KiwiBuild programme.

Will a cut in migration choke the provinces?
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The new government seeks to reduce migration from its record breaking highs. It also has a strong focus on regional development as many regions face declining population. However, it faces a mighty challenge to reconcile these two policies which could work against each other.
Who will get Shane Jones’ pot of gold?
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Regional economic development is a high priority for the newly-formed coalition Government. Nothing highlights this more than returning MP, Minister for Regional Economic Development, and Minister for Infrastructure, Shane Jones being given a $1 billion per annum Regional Development (Provincial Growth) Fund.
Accessing the Regional Development Fund is not just about GDP
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The Labour-NZ First coalition has earmarked $1 billion per annum for regional development. Strong business cases will be needed by local authorities vying for a slice of these funds. Don’t over-rely on GDP in these business cases.
Modelling supply-side constraints in the construction sector
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We’ve received feedback that our forecasts for new dwelling consents are overly optimistic given capacity pressures. In response to this feedback, we have created a supply-side model to help inform our residential construction forecasts. Our core model is essentially a demand-based one. In most cases, the underlying fundamentals of population growth and interest rates are enough to inform us of what’s to come. But this approach only works if supply can keep up.