Acknowledgements The Projections for Palmerston North publication was developed by Palmerston North City Council to provide a better understanding of the different components which contribute to population, housing and economic growth in the City. Population, household and family, and labour force projections are developed at a local and national level to assist communities, businesses and central and local government in planning for the future. The employment projections in this report were initially developed to guide the Council’s industrial land study, which was being updated to identify future industrial land needs in the City. The projections are relevant to the development of the Council’s 10 Year Plan and are of assistance to longer-term planning by the business and community sectors. The growth projections are not forecasts, but are projections of the growth that might be achieved if previous growth patterns continue. Key assumptions to adjust the current growth rates are based on projected changes in the fertility rate (the number of births per female), life expectancy, net migration levels and labour force participation rates. For further information please contact Peter Crawford, Economic Policy Advisor, Palmerston North City Council, Private Bag 11034, Palmerston North 4442 (email: [email protected]). Published by: City Future Unit Palmerston North City Council Private Bag 11034 Palmerston North Phone: 06 356 8199 Fax: 06 355 4115 www.pncc.govt.nz

2

Table of Contents Executive Summary

3

Introduction

6

1. Population Projections a. Past and current population trends

9

b. Statistics New Zealand population projections 2013 2043

11

2. Employment Projections a. Past and current employment trends

20

b. Statistics New Zealand national labour force projections 2015 - 2043

24

c. Palmerston North medium projections 2013 - 2043

24

employment

growth

3. Household Projections a. Past and current household trends b. Statistics New Zealand projections 2013 – 2038

family

27 and

household

29

4. Ethnicity a. Past and current ethnic trends

35

b. Statistics New Zealand ethnic population projections, 2013 - 2038

37

3

Executive Summary Palmerston North City has recorded strong economic growth Palmerston North has experienced strong economic growth over most of the last fifteen years. The rate of growth in the number of jobs and incomes has been higher than the rate of population growth in the City. The projections suggest that the strong rate of growth in the number of jobs and incomes is likely to continue. Five key sectors are expected to contribute to a significant share of future growth in the number of jobs and income in the City over the next 25 years. They are healthcare, tourism, logistics, public administration (including defence), and research. The education and defence sectors are not likely to grow as fast as the key growth sectors, but they remain important sectors for the City economy. They play an important role in attracting businesses and young people to the City. The education and defence sectors are also relatively independent of national economic cycles, and may even operate in a counter cyclical role. The projections suggest significant change in the City will occur due to an aging population and workforce, and a rapid change in the ethnic composition of the City’s population. These changes in the ethnicity of Palmerston North’s population are projected to accelerate through the projection period.

Population projected to increase to 98,800 by 2043 Statistics New Zealand projects Palmerston North’s population will grow by 15,300 between 2013 and 2043 (medium growth projection), with the City’s population reaching 98,800 by 2043. The medium 30-year growth projection of 0.6 percent average annual growth for Palmerston North is lower than the national average of 0.8 percent.

Strong employment growth is projected Employment growth projections for the City are strong, with medium growth projections suggesting employment may rise by 20,900 jobs (46 percent increase) between 2013 and 2043, an average annual increase of 1.2 percent. Key growth sectors over the next 30 years are likely to be: 

Healthcare and social assistance, including hospitals, specialist medical services, home care services and care for the aged



Tourism, particularly retail, accommodation and food services



Logistics, including wholesaling, transport, postal and warehousing



Public administration and safety, including defence



Professional, scientific and technical services, including research

The employment projections for Palmerston North are based on an assumption that there will be an ongoing increase in labour force participation levels among the population aged 65 and over. The low median age of the Palmerston North population offers greater potential for stronger increases in work force participation rates compared with the New Zealand workforce overall.

4

Palmerston North’s labour market catchment will increase Growth in the City’s labour market catchment is expected to continue due to increases in the number of workers commuting to the City from nearby local authorities. The high level of commuting to and from Palmerston North is more typical of larger metropolitan cities such as Wellington and Hamilton.

Our population is aging - but not as quickly as other parts of New Zealand The City’s population will age, with significant growth in the number of people aged 65 and over. However the impact of the aging population on the City will be less than in other areas of New Zealand. The median age in the City is expected to rise by 3.6 years to 37.0 by 2043, while the national median age is expected to rise by 5.2 years to 42.7 by 2043. The projected 2043 median age for Palmerston North of 37.0 years will be the lowest of any local authority in New Zealand. As the population ages, the annual population growth rate in the City over the period from 2013 to 2043 is projected to slow. This will result in the average annual growth rate declining from 0.8% over the period from 2013 to 2018 to 0.4 percent between 2038 and 2043.

But population growth for other age groups will continue While the fastest rate of growth will be in the 65 years and over population, there is still expected to be growth in other age groups. The projections suggest the 0 – 14 years age group population will increase from 16,700 people in 2013 to 17,100 by 2043. The 15 – 39 years population is projected more strongly from 31,600 people in 2013 to 36,100 by 2043 and the 40 – 64 population will increase from 24,300 in 2013 to 25,600 people in 2043.

Households will increase at a faster rate of growth than population growth The total number of households in Palmerston North is projected to increase from 31,500 in 2013 to 38,400 by 2038, an average annual increase of 0.8 percent. The rate of growth in the number of households is projected to slow over the 25 year projection period, reflecting the projected slowing in population growth during this period. The number of households is projected to increase by 6,900 between 2013 and 2038, an average of 276 new homes a year, but there is likely to be change in the mix of houses being built. As a result of the aging population it is expected more households will be apartments or villas in retirement villages or other forms of more intensive housing development. The proportion of one person households is projected to increase from 25 percent of all households in 2013 to 29 percent in 2038.

Major ethnic change is projected Statistics New Zealand projections suggest Palmerston North will become significantly more ethnically diverse in the future. The Pacific community is projected to grow the fastest from 3,870 people in 2013 to 8,410 by 2038. Pasifika people will them make up 8.7 percent of the City’s population.

5 By 2038 Māori are expected to make up 25.6 percent of the population. The number of Māori will increase by 10,500 people between 2013 and 2038, and reaching 24,800. The Asian population is also projected to grow strongly, increasing by 7,950 people between 2013 and 2038, an average annual increase of 2.7 percent. By 2038, Asians are projected to account for 17 percent of the City population, with a population of 16,500 people. The rate of ethnic change will be particularly noticeable in the 0 – 14 years population. The projections suggest that by 2038, 41 percent of 0 – 14 year olds in the City will identify with a Māori ethnicity, 18 percent with an Asian ethnicity and 17 percent with a Pacific ethnicity, while 70 percent will identify with a European ethnicity.1

Families will continue to change The Statistics New Zealand projections suggest that households made up of couples without children will increase from 41 percent of households in 2013 to 45 percent of households by 2018. This increased share may be partly due to an increase in the number of older couples who no longer have children living at home. The projections suggest a similar rate of increase in one-parent and two-parent families.

Average household size will continue to decline Average household size is projected to decline from 2.6 people per household in 2013 to 2.4 people in 2038. This has implications for parts of the City where there is little development of more intensive forms of housing. As a consequence, there will continue to be a decline in population counts in some parts of the City.

1

note the number of ethnicities adds to more than 100 percent, reflecting that many people identify with more than one ethnicity

6

Introduction This report has been prepared to bring together recent Council analysis on economic, housing and population trends in Palmerston North as well as a range of population, housing and employment projections for the City prepared by Statistics New Zealand. There are limitations to the extent to which past trends can point to future economic growth and demographic trends but it is clear the City is already undergoing significant change, particularly in the ethnicity of its population. Chapter 1 provides an overview of recent population growth in the City and the Statistics New Zealand projections for growth to 2043. There have been times recently of significant differences in population and employment growth and both indicators are important as measures of the health of the City. Chapter 2 provides a brief analysis of employment trends in the City since February 2000. A brief overview is provided on recent Statistics New Zealand national labour force projections to 2043 and an analysis of the projections prepared by the Council for employment growth in Palmerston North through to 2043. The Chapter 3 data on household projections suggests that growth in the number of households in the City will slow gradually over the projection period while population growth is expected to slow more significantly. Average household size is projected to decline over the period to 2038. Chapter 4 summarises the key changes in the ethnicity of the City’s population which are already taking place and which will contribute to further change over the period to 2038.

Overview of Population and Labour Force Projections The series covered in this document include projections for the total New Zealand population, local and regional populations, various ethnic groups, families and households, and the labour force. It is appropriate to draw attention to some of the constraints that apply to these series. Firstly, these demographic projections are neither predictions nor forecasts. They represent the statistical outcomes of various combinations of selected assumptions about future changes in various dynamics of population change. These assumptions are formulated from the latest demographic trends and patterns, as well as international experiences. The assumptions used for each set of projections are outlined in each section of the publication. Secondly, given the uncertainties about future trends in fertility, mortality and migration and their determinants, Statistics New Zealand derives a range of alternative demographic scenarios. However, because of space restrictions, the medium growth series has been used in the majority of the analysis and only brief comment is included on the high and low growth scenarios. In general, the chosen series conveys the broad features of likely future dynamics and patterns in Palmerston North. Thirdly, these projections do not take into account non-demographic factors such as war and catastrophe that may invalidate the projections. Population trends and patterns are monitored regularly and, when it is necessary, the projections are revised to incorporate new demographic evidence. A similar approach is taken with the Council 10-year plan, which is updated every three years. In summary, the main prospects in the coming decades are for continuing low fertility, slower population growth, further gains in life expectancy, smaller households, increasing ethnic

7 diversity, an ageing population, an older labour force, and a further concentration of population in the northern North Island. The Statistics New Zealand projections used in preparing this paper were: Subnational Population Projections: 2013(base) – 2043 – released 19 February 2015. Subnational Family and Household Projections: 2013(base) – 2038 – released 8 December 2015. Subnational Ethnic Population Projections: 2013(base) – 2038 – released September 2015. The employment projections prepared for Palmerston North City have been based on employment change in the City over the period from 2000 to 2014 and analysis of whether similar levels of employment change are likely to continue over the period to 2043. The employment projections have been prepared for employment at the 2-digit ANZSIC06 level.

How Accurate are the Population Projections Produced by Statistics New Zealand? The report by Statistics New Zealand “How Accurate are Population Projections? An evaluation of Statistics New Zealand population projections, 1991–2006” offers the following conclusions: •

Projections for larger geographic areas have smaller relative errors than projections for smaller geographic areas. Projection uncertainty therefore increases for smaller regions and local authorities.

•

Areas with the largest relative errors are generally those that have experienced the most rapid population change (either increase or decrease) and/or those that have experienced significant swings in net migration.

•

The intercensal projections update, produced two years after the first set of projections, has been more accurate than the first set.

•

The medium or mid-range projection has been more likely to under-project than overproject the population of geographic areas in New Zealand over the period of assessment (1991–2006), although there is no inevitability about the future direction of errors.

•

No regional council area was consistently under-projected or over-projected by the medium series. Among territorial authority areas, only Manukau was consistently underprojected and Opotiki consistently over-projected by the collective low-medium-high series.

•

The volatility of New Zealand’s external migration balance appears to play an important role in projection accuracy. The 1991–1996 and 2001–2006 periods were high positive net migration periods by New Zealand standards and geographic areas were generally under-projected. In contrast, 1996–2001 was a low net migration period and geographic areas were generally over-projected.

•

The nature of the top-down approach, where national projections are prepared before subnational projections, means that national accuracy and subnational accuracy are correlated.

•

Projections of deaths are more accurate than projections of births, while (net) migration is the most difficult component to either project or to formulate assumptions for future change.

8 •

For projections by age, accuracy has generally been highest for ages 30 years and over. Accuracy for the youngest ages (0–14 years) and young adult ages (20–39 years) has been lower, on average, reflecting fluctuations in births and overseas migration at those ages, respectively.

•

The projections do not take into account major events which may invalidate the projections. Major events include wars, catastrophes, government and business decisions, and institutional changes (e.g. armed forces, prisons, and universities) which are not known at the time of production. These events can significantly influence population dynamics at a national or local level.

Over the period from 1991 to 2006 actual population growth in Palmerston North fell between the low and medium growth projections. Fluctuations in tertiary enrolments, changes in net migration within the Manawatū-Whanganui region and net external migration were the main contributors to variations in the growth rate for the City.

9

Population Past and Current Population Trends The estimated population of Palmerston North City was 85,500 at 30 June 2015, an increase of 1,100 people from 30 June 2014. This represents an annual increase of 1.3 percent, compared with the national population increase of 1.9 percent over the same period. The City’s population is estimated to have increased by a total of 5,300 people over the past ten years, an annual average increase of 530 people. There was no population growth in the City between 1996 and 2001. The annual contribution to City population from natural population increase (the difference between births and deaths) during this period varied by between 500 and 650 people but net migration was negative. Declines in student enrolments at tertiary institutions in the City (Massey University, UCOL, IPC and English language providers) and a decline in manufacturing employment appear to be among significant factors in the loss of population which occurred from migration.

Source: Statistics New Zealand subnational population estimates

Population growth accelerated in 2002 and 2003 due to a major increase in international students, particularly Chinese students, but the influx of students was short-lived. Population growth improved again over the 2009 to 2011 period in response to major construction projects in the City while the sharp increase in population growth in 2014 and 2015 was mainly due to a significant decline in migration to Australia. Over the 19-year period between 1996 and 2015, the gain from natural population growth has averaged 572 people a year while net migration (overseas and domestic) has averaged a loss of 130 people a year, resulting in average population growth of 442 people a year.

10

Source: Statistics New Zealand subnational population estimates

The annual number of births in New Zealand peaked at 66,100 in 1966 but declined to 49,700 by 1982. There was a further increase in the number of births in the late 1980’s and early 1990’s, increasing to 60,400 in 1992, but then they declined over the next ten years to a low of 54,000 births in 2002. Births again increased over the next eight years, increasing to 64,100 by 2010, before beginning to decline again. The number of births in Palmerston North has largely followed the same pattern.

Source: Statistics New Zealand births

11 More recently there has been a further increase in the number of births, with the sharp decline in migration to Australia since 2013 likely to be one of the contributors to the increase in births. The biggest decline in departures has been in 15 – 39 years age groups.

Source: Statistics New Zealand international travel and migration

Overseas departures from Palmerston North peaked in 2001, with a high of 1,540 people but had declined to 932 people in the year ended June 2015.

Statistics New Zealand Population Projections 2013 – 2043 The latest Statistics New Zealand population projections suggest the City will reach a population of 98,800 people by 2043, an increase of 15,300 people from the population in 2013. The projected annual average growth rate of 0.6% for Palmerston North is below the projected growth rate of 0.8% for New Zealand. The projections suggest an annual net migration gain for New Zealand of 12,000 people a year between 2018 and 2043 but no gain for Palmerston North from net migration over this period.

Table 1: Palmerston North population projections Population change 2013–43

Population at 30 June Projection 2013 High Medium Low

83,500

2033

2018

2023

2028

88,500

93,200

98,100 102,800 107,400 111,800

28,400

1.0

86,800

89,600

92,300

94,700

96,900

98,800

15,300

0.6

85,000

85,900

86,400

86,700

86,500

86,000

2,500

0.1

Source: Statistics New Zealand subnational population projections

2038

2043

Average Number annual percent

12 Alternative population projection series (designated low, medium and high) are produced by Statistics New Zealand for each local authority incorporating different fertility, mortality and migration assumptions reflecting each area's unique socio-demographic characteristics. The three projections scenarios are based on the following national population assumptions: Low population growth – low fertility rate, high mortality rate and low net migration. Medium population growth – medium fertility rate, medium mortality rate and medium net migration. High population growth – high fertility rate, low mortality rate and high net migration. The projections show a decline in the average rate of growth over the 30-year period covered by the projections. The growth rate for Palmerston North is projected to be 0.8 percent between 2013 and 2018, declining to 0.4 percent over the period between 2038 and 2043. The growth rate for New Zealand is projected to decline more quickly, slowing from projected growth of 1.3 percent between 2013 and 2018 to 0.5 percent between 2038 and 2043.

Table 2: Projected average annual growth rate by 5-year period Population at 30 June

Territorial authority area Palmerston North Average annual grow th rate New Zealand

2013

2018

2023

2028

2033

2038

2043

83,500

86,800

89,600

92,300

94,700

96,900

98,800

0.8%

0.6%

0.6%

0.5%

0.5%

0.4%

4,442,100 4,738,400 4,948,800 5,152,900 5,338,300 5,499,100 5,639,000

Average annual grow th rate 1.3% 0.9% Source: Statistics New Zealand subnational population projections

0.8%

0.7%

0.6%

0.5%

The projections suggest further growth in the concentration of population in Auckland, which is projected to account for 60 percent of national population growth between 2013 and 2043. The two local authorities on the fringe of Christchurch (Waimakariri and Selwyn) and Queenstown-Lakes District Council are the only local authorities which are expected to have growth rates as strong as or stronger than Auckland. Three further Councils (Hamilton, Tauranga and Ashburton) are projected to grow more quickly than the average for New Zealand while the remainder of Councils are projected to grow more slowly than the average. Influences on the projected rate of growth in Palmerston North include:

Total Population The size of a urban area population is among the factors that influences the longer-term rate of population growth. The fastest rate of population growth is projected to be in the largest cities. Hamilton and Tauranga are projected to grow more strongly than Palmerston North while smaller provincial centres are generally projected to experience weaker population growth than in Palmerston North.

13

Table 3: Population projections for other regional cities Estimated population at Projected Population Change Projected 30 June 2013–2043 median age in 2043 (years) 2013 2043 Number Percent

Territorial authority Hamilton City

150,200

212,900

62,700

41.7%

37.2

Tauranga City

119,800

172,100

52,300

43.7%

44.0

Dunedin City

123,500

130,700

7,200

5.8%

39.8

83,700

99,800

16,100

19.2%

46.1

Whangarei District Low er Hutt City

101,200

99,100

-2,100

-2.1%

43.9

Palmerston North City

83,500

98,800

15,300

18.3%

37.0

New Plymouth District

77,100

93,800

16,700

21.7%

45.8

Hastings District

76,700

83,000

6,300

8.2%

45.7

Rotorua District

68,400

65,200

-3,200

-4.7%

44.6

Napier City

59,600

62,500

2,900

4.9%

48.0

4,442,100 5,639,000

1,196,900

26.9%

42.7

New Zealand

(Note: the population count data is rounded to the nearest 100) Source: Statistics NZ 2013-base subnational population projections

Employment Growth New Plymouth is projected to grow more strongly than Palmerston North, reflecting significant growth in recent years in mining and oil and gas production in the Taranaki region. The number of jobs in New Plymouth increased by 37% between 2000 and 2014, well ahead of the 18% job growth in Palmerston North over this period. Dunedin and Lower Hutt are also exceptions to the link between the size of the urban area and projected population growth, since they are larger than Palmerston North but are projected to record weak population growth (Dunedin) or population decline (Lower Hutt). Dunedin employment increased by 12% between 2000 and 2014 while Lower Hutt employment increased by just 4%.

Table 4: Change in employee counts and earnings for other regional cities Territorial authority

Employment count at Employment change February 2000 - 2015 2000

Earnings change 2000 - 2014

Percent

2000

2014 Number

Percent

Hamilton City

58,190

81,270 23,080

39.7%

2,047

4,417

2,369

115.7%

Tauranga City

35,370

55,080 19,710

55.7%

1,224

2,861

1,637

133.7%

Dunedin City

47,940

54,500

6,560

13.7%

1,547

2,856

1,310

84.7%

Low er Hutt City

40,360

41,870

1,510

3.7%

1,561

2,552

992

63.5%

Palmerston North City

39,010

46,680

7,670

19.7%

1,270

2,423

1,153

90.8%

New Plymouth District

25,850

35,500

9,650

37.3%

916

2,245

1,329

145.1%

Hastings District

31,600

40,150

8,550

27.1%

854

1,863

1,010

118.3%

Whangarei District

23,640

31,690

8,050

34.1%

851

1,737

886

104.1%

Rotorua District

26,610

29,580

2,970

11.2%

870

1,584

714

82.1%

Napier City

22,290

23,950

1,660

7.4%

714

1,161

447

62.6%

1,596,320 2,045,610 449,290

28.1%

46,292

97,724 51,431

111.1%

New Zealand

2015 Number

Earnings (salaries, w ages and self-employment) Year ended March, $m

Source: Statistics NZ business demography and linked employer-employee data (LEED)

Asian Migration University cities all have much higher Asian population shares than the national average but Census 2013 data shows strong growth is also occurring in Asian populations in nonuniversity cities. Massey University, UCOL (Manawatu Polytechnic) and International

14 Pacific College (IPC) attract a significant number of students to Palmerston North. While many return to their home country at the completion of their studies, a significant number have also made Palmerston North their home. The settlement of refuges in the City since 2006 has also contributed to the strong growth in the Asian population in the City. The Asian share of the Palmerston North population has increased rapidly from 5.9% of the City population in 2001 to 9.3% in 2013. Tertiary Education and Defence The tertiary education sector and two major defence bases in the region are important attractors of young people into the City. The City has one of the lowest median ages (33.4 years in 2013) and by 2043 is projected to have the youngest population in New Zealand. For example, the education sector may increase during periods of weak economic growth, with students staying at school for longer and increased tertiary education enrolments. The Defence Forces also find staff easier to attract and retain during weaker periods of economic growth.

Projected Palmerston North Population Structure Changes 2013 - 2043 One of the factors contributing to the strength of the population projections for Palmerston North over the 30-year projection period is the low median age for the City population. In 1996 the median age in Palmerston North was 29.2 and this is projected to rise to 37.0 by 2043 (7.8 years increase over 47 years). The median age for New Zealand in 1996 was 32.8 and is projected to rise to 42.7 by 2043 (9.9 years increase). The median age difference between the City and the median for New Zealand is projected to widen from 3.6 years in 1996 to 5.7 years by 2043, and the 2043 median age for the City will still be lower than the 2013 median age of the New Zealand population. Hamilton City currently has a younger population but by 2043, Palmerston North will have the lowest median age of any local authority in New Zealand.

Table 5: Actual and Projected Median Age Year at 30 June

Palmerston North

New Zealand

Difference

1996

29.2

32.8

3.6

2001

31.2

34.7

3.5

2006

32.2

35.8

3.6

2013

33.4

37.5

4.1

2018

33.5

37.7

4.2

2023

34.0

38.4

4.4

2028

34.9

39.3

4.4

2033

35.7

40.6

4.9

2038

36.5

41.8

5.3

2043

37.0

42.7

5.7

Source: Statistics New Zealand subnational population projections

The low median age in Palmerston North will continue to be an important factor in supporting population growth in the City, since from 2018 all of the projected population growth is expected to come from births continuing to exceed deaths, with no gain from migration. The annual contribution to population growth from natural increase is expected to slow from an annual increase of 560 people over the period from 2013 to 2018 to 380 people a year over the period from 2038 to 2043.

15 The strongest population growth is projected to be in the 65 years and over age group, contributing to a rise in their share from 13 percent of the City population in 2013 to a 20 percent share by 2043. However, the increase in the proportion of the City population in the 65 years and over age group does not imply declines in the number of people in other age groups. All other age groups are projected to rise between 2013 and 2043 although the 0 – 14 years age group is projected to experience a small decline between 2028 and 2033.

Table 6: Projected Population by Age Group Year at 30 June

2013

2043

2013 to 2043 annual average change

Palmerston North city 0-14 Years 15-39 Years 40-64 Years 65 Years and over Total

16,700 31,600 24,300 10,900 83,500

17,100 36,100 25,600 20,100 98,800

0.1% 0.4% 0.2% 2.1% 0.6%

New Zealand 0-14 Years 15-39 Years 40-64 Years 65 Years and over Total

908,800 1,452,300 1,455,000 626,000 4,442,100

946,700 1,689,700 1,661,700 1,341,000 5,639,000

0.1% 0.5% 0.4% 2.6% 0.8%

Source: Statistics New Zealand subnational population projections

Source: Statistics New Zealand subnational population projections

The projected growth rate for the City for the 2013 to 2043 period is weaker than the previous projections for the 2006 to 2031 period, primarily due to a annual migration loss of 100 people a year between 2008 and 2013. The previous projections suggested a stronger growth rate for the City compared with Christchurch and New Plymouth but these two cities are now expected to grow more strongly than Palmerston North. Palmerston North is

16 projected to have a stronger contribution from natural population increase than New Plymouth but a weaker contribution from migration. The weak contribution from migration reflects weak housing growth in the Palmerston North urban area and a steady increase in the proportion of the City’s workforce that commutes in from surrounding settlements. Manawatū District currently has the highest rate of growth in the Manawatū-Whanganui region while growth rates in other local authorities near Palmerston North have improved, with smaller declines than previously projected and population growth is now projected in Horowhenua. Caution is required with the population projections since the increase in the number of new dwellings currently in Palmerston North is insufficient to cater for the estimated population increase. This is not fully reflected in the annual population estimates, with greater revisions to the population estimates occurring when the Census is held. The 2013 Census resulted in a downwards revision of 2,300 people to the population of Palmerston North and increases of 600 people to the populations of Manawatū and Horowhenua Districts and an increase of 400 people to the population of Whanganui District.

Table 7: Projected contributions to population change At 30 June Territorial authority

2013

2043

Projected Population Change 2013–2043 Natural Net Total Average Increase Migration Increase Annual change

Tauranga City

119,800

172,100

15,900

36,500

52,300

1.2%

Hamilton City

150,200

212,900

44,200

18,500

62,700

1.2%

Christchurch City

356,700

436,800

35,100

45,000

80,100

0.7%

Wellington City

197,500

241,000

43,000

500

43,500

0.7%

New Plymouth District

77,100

93,800

6,200

10,500

16,700

0.7%

Whangarei District

83,700

99,800

6,600

9,500

16,100

0.6%

Kapiti Coast District

50,700

60,000

-2,500

12,000

9,300

0.6%

Palmerston North City

83,500

98,800

14,900

500

15,300

0.6%

Nelson

48,700

55,900

200

7,000

7,200

0.5%

Hastings District

76,700

83,000

8,400

-2,000

6,300

0.3%

Porirua City

53,700

57,600

12,200

-8,300

3,900

0.2%

Dunedin City

123,500

130,700

2,700

4,500

7,200

0.2%

59,600

62,500

2,100

700

2,900

0.2%

101,200

99,100

15,800

-18,000

-2,100

-0.1%

Rotorua District 68,400 65,200 8,800 -12,000 Source: Statistics New Zealand subnational population projections

-3,200

-0.2%

Napier City Lower Hutt City

Area Unit Population Estimates Since 2008 Statistics New Zealand has produced population estimates and long-term population projections at an area unit level, which match the five-yearly population count data from the Census. The estimates and Census data show that growth in the City’s population has been strongly concentrated in the area units where greenfield and rural/residential housing development has been taking place. Infill housing has been accounting for an increased share of new residential building activity in the City but despite this, declining average household size has resulted in declines in population in a number of area units in the City. Over the period from 1996 to 2015 there was an increase of 8,400 people in Palmerston North. The strongest population growth occurred in Kelvin Grove (4,110 population increase), Aokautere (1,720 increase), Turitea (880 increase), Milson (600 increase), Whakarongo (380 increase), all area units at the margins of the City’s main urban area. Other growth areas include the villages within the wider Palmerston North local

17 authority boundary, such as Ashhurst (370 increase), Longburn (140 increase) and Bunnythorpe (included mostly within the Stoney Creek area unit, which increased by 240 people). Some population growth occurred in areas with higher levels of infill, particularly Hokowhitu East, Roslyn and West End, but other area units showed declines in population. The number of people employed at Linton Military Camp has increased but the number accommodated on the base has declined.

Table 8: Palmerston North Area Unit Population Estimates (2013-base) Year at 30 June Kelvin Grove Aokautere Turitea Whakarongo Stoney Creek Longburn Kairanga Ashhurst Milson Awapuni West Hokowhitu East Roslyn West End Hokowhitu Lagoon Hokowhitu West Terrace End Awapuni South Palmerston North Central Takaro Westbrook Awapuni North Highbury Papaioea Palmerston North Hospital Cloverlea Linton Military Camp Massey University Palmerston North city

1996 3,180 1,830 1,100 710 620 540 750 2,660 5,200 1,430 5,020 5,680 4,860 1,600 4,400 3,110 3,460 3,050 5,500 4,330 3,620 3,470 2,910 2,930 2,190 1,880 1,080 77,100

2001 3,550 2,320 1,230 750 590 560 780 2,650 5,400 1,430 5,070 5,500 4,540 1,630 4,370 3,030 3,430 2,980 5,520 4,410 3,540 3,370 2,730 2,840 2,190 1,870 850 77,100

2006 5,030 3,300 1,670 800 730 600 880 2,650 5,430 1,460 5,130 5,590 4,820 1,610 4,210 3,090 3,340 3,220 5,440 4,350 3,550 3,340 2,880 2,770 2,120 1,960 810 80,800

2013 7,090 3,620 1,950 980 880 680 900 2,880 5,690 1,470 5,180 5,840 4,910 1,570 4,330 3,070 3,350 2,980 5,460 4,150 3,440 3,250 2,730 2,690 1,990 1,590 810 83,500

2015 7,290 3,550 1,980 1,090 860 680 910 3,030 5,800 1,520 5,320 5,910 4,980 1,630 4,460 3,150 3,500 3,060 5,460 4,280 3,510 3,360 2,800 2,760 2,060 1,660 860 85,500

1996 - 2015 4,110 129.2% 1,720 94.0% 880 80.0% 380 53.5% 240 38.7% 140 25.9% 160 21.3% 370 13.9% 600 11.5% 90 6.3% 300 6.0% 230 4.0% 120 2.5% 30 1.9% 60 1.4% 40 1.3% 40 1.2% 10 0.3% -40 -0.7% -50 -1.2% -110 -3.0% -110 -3.2% -110 -3.8% -170 -5.8% -130 -5.9% -220 -11.7% -220 -20.4% 8,400 10.9%

Source: Statistics New Zealand population estimates

Area Unit Population Projections 2013 – 2043 The pattern of projected area unit population growth in the City reflects Council residential growth preferences for the development of Whakarongo and then followed by Pioneer West (covering the Westbrook and Awapuni West area units). Changes currently proposed to the Council’s District Plan may support increased population densities in the main urban area, but the Plan is not the only determinant of the rate of development of higher densities. Retirement village development is also an important influence on future housing provision, accounting for an increased share of new housing units developed in the City. A significant share of projected population growth is in older age groups so it is expected there will be further growth in the development of retirement villages and residential care facilities. The

18 location of these will have an important influence on the pattern of future population growth in the City. Table 9: Projected Palmerston North Area Unit Population Change (2013-base) Year at 30 June 2013 2018 2023 Whakarongo 980 1,290 1,910 Turitea 1,950 2,240 2,540 Awapuni West 1,470 1,530 1,640 Stoney Creek 880 960 1,050 Westbrook 4,150 4,180 4,210 Massey University 810 870 930 Aokautere 3,620 3,890 4,160 Longburn 680 720 760 Ashhurst 2,880 3,050 3,180 Kelvin Grove 7,090 7,760 8,120 Palmerston North Central 2,980 3,110 3,190 West End 4,910 5,070 5,140 Hokowhitu Lagoon 1,570 1,620 1,660 Awapuni South 3,350 3,450 3,550 Roslyn 5,840 6,030 6,190 Hokowhitu East 5,180 5,290 5,350 Terrace End 3,070 3,110 3,150 Cloverlea 1,990 2,020 2,050 Palmerston North Hospital 2,690 2,770 2,800 Papaioea 2,730 2,800 2,810 Takaro 5,460 5,510 5,560 Awapuni North 3,440 3,450 3,460 Hokowhitu West 4,330 4,420 4,450 Highbury 3,250 3,260 3,280 Kairanga 900 910 920 Linton Military Camp 1,590 1,660 1,690 Milson 5,690 5,780 5,800 Palmerston North city 83,500 86,800 89,600 Source: Statistics New Zealand population projections

2028 2,540 2,850 1,910 1,130 4,490 990 4,430 800 3,270 8,260 3,260 5,240 1,690 3,610 6,290 5,400 3,170 2,070 2,820 2,830 5,590 3,470 4,460 3,290 930 1,680 5,800 92,300

2033 3,080 3,170 2,180 1,210 4,970 1,050 4,690 840 3,340 8,290 3,330 5,350 1,720 3,650 6,370 5,440 3,190 2,080 2,810 2,830 5,600 3,470 4,450 3,300 930 1,650 5,770 94,700

2038 3,620 3,480 2,450 1,280 5,470 1,110 4,930 880 3,390 8,320 3,380 5,460 1,740 3,670 6,400 5,440 3,200 2,070 2,790 2,820 5,580 3,480 4,430 3,290 920 1,620 5,710 96,900

2043 4,170 3,780 2,720 1,340 6,000 1,170 5,140 920 3,420 8,310 3,430 5,560 1,750 3,690 6,400 5,420 3,210 2,050 2,760 2,800 5,550 3,490 4,380 3,270 900 1,580 5,630 98,800

2013 - 2043 change 3,190 325.5% 1,830 93.8% 1,250 85.0% 460 52.3% 1,850 44.6% 360 44.4% 1,520 42.0% 240 35.3% 540 18.8% 1,220 17.2% 450 15.1% 650 13.2% 180 11.5% 340 10.1% 560 9.6% 240 4.6% 140 4.6% 60 3.0% 70 2.6% 70 2.6% 90 1.6% 50 1.5% 50 1.2% 20 0.6% 0 0.0% -10 -0.6% -60 -1.1% 15,300 18.3%

Manawatū-Whanganui Region Population Projections The total Manawatū-Whanganui region population is projected to grow by just 3,500 people over the period from 2013 to 2043 even though Palmerston North is projected to increase by 15,300 over this period. Population declines over the 30 year period are projected in five of the seven local authorities in the region. Horowhenua is projected to increase between 2013 and 2018 but then decline in later years. The projected population decline in these five local authorities is now significantly less than was projected by Statistics New Zealand in 2005, reflecting the improvement in economic performance in the region. It is difficult to provide an accurate estimate of the change because the delay in the Census in 2011 also resulted in a change in the projection time periods. For example the current projections for population counts in 2018 do not align with the previous projections for population projections for 2016 and 2021. The 2005 projections suggested the region’s population would be 225,800 in 2006 while the latest projections suggest the region’s population will have grown to 238,500 by 2028. The projections show the growing importance of Palmerston North within the region, which is projected to increase its share of the region’s population from 33 percent in 1996 to 42 percent by 2043.

19

Table 10: Medium Population projections for ManawatūWhanganui Region (2013-base) At 30 June Manaw atū-Whanganui Territorial Authorities

2013

Projected Population Change 2013 – 2043

2043

Number

Average Annual Percent

Ruapehu District

12,450

8,180

-4,250

-1.4

Whanganui District

43,500

40,200

-3,300

-0.3

Rangitikei District

14,550

12,300

-2,250

-0.6

Manaw atū District

28,500

31,200

2,700

0.3

Palmerston North City

83,500

98,800

15,300

0.6

Tararua District

17,450

15,150

-2,300

-0.5

Horow henua District

31,200

28,600

-2,500

-0.3

Manaw atū-Whanganui Region New Zealand

231,200

234,700

3,500

0.0

4,442,100

5,639,000

1,196,900

0.8

(No te: the bo undary fo r the M anawatū-Whanganui regio n do es no t match precisely with the area co vered by the lo cal autho rities abo ve)

Source: Statistics New Zealand subnational population projections

20

Employment Past and Current Employment Trends Employment in Palmerston North grew between 2000 and 2009 but declined following the global financial crisis. Employee counts have been slow to recover to 2009 levels but Statistics New Zealand revisions to the data have contributed to that weakness2. While population growth for the City has been consistently weaker than national population growth rate, the growth rate for the number of employees in the City has been closer to the national employment growth rate. National employment growth in percentage terms has been faster than national population growth (28 percent and 19 percent respectively) but absolute employment growth of 449,300 has been lower than total population growth of 739,000. In contrast employment growth in Palmerston North of 7,670 jobs (19.7 percent increase) between 2000 and 2015 has been much closer to population growth of 8,100 people (10.5 percent) over the same time period.

Source: Statistics New Zealand business demography and population estimates

Earnings (salaries, wages and self-employment) data shows the City exceeding national growth levels between 2000 and 2011 but the growth rate has been lower than the national growth rate since then. The impact of the Canterbury rebuild since the 2010 and 2011 earthquakes is one contributor to the stronger growth rate for New Zealand since 2011. Other contributors to the higher growth rate since 2011 have been government investment in the ‘Roads of National Importance’ projects and housing development in Auckland. The earnings data also shows that average wages in the City have increased faster than the national average but the ratio has been stable since 2010. 2

Changes to employment data in the City include revisions to ‘Allied health care services’, where job counts declined from 1,940 in 2007 to 1,160 in 2015, and ‘Road and bridge construction’, in both cases due to employee counts being moved to the local authorities where employees are based.

21

Source: Statistics New Zealand LEED

Employment Change by Sector An encouraging aspect of the employment growth in Palmerston North has been the strength of growth across a range of sectors, reducing the City’s reliance on the tertiary education sector. Tertiary education remains very important to the City but the level of growth which has been occurring in a broad range of sectors reduces the vulnerability of the City to an economic downturn in one or two sectors. This has been apparent with the decline in the relative share of the tertiary education sector since 2000. In 2000 employee earnings in the total education sector (early childhood through to tertiary education) contributed 16.4 percent of total employee earnings in the city but by 2014 the sector’s share had reduced to 13.3 percent. Education sector employee earnings increased by 54 percent between 2000 and 2014 but this was weaker than the 91 percent increase in overall employee earnings in the City. In 2000, the health care and social assistance sector was much smaller than the education sector, with annual earnings of $133 million for the sector compared with $208 million for the education sector. Rapid growth in health care and social assistance sector earnings resulted in it overtaking the education sector in 2009. Health care and social assistance sector earnings were $354 million in the year to March 2014 compared with $321 million for the education sector. There has been similar strong growth in the public administration and safety services, with earnings increasing from $123 million in 2000 to $299 million by 2014. A third sector, which may also eventually overtake the education sector for total earnings is the logistics sector (wholesale trade, postal and transport services), which experienced growth in earnings from $120 million in 2000 to $272 million in 2014. Australian New Zealand Industry Classification (ANZSIC) sector data does not show the tourism sector, which is also a major source of employment growth in the City. A tourism

22 satellite account is used to estimate tourism GDP and employment because it is an activity that encompasses a range of ANZSIC industry sectors. Retailing (including commercial accommodation and food services), however, accounts for the largest share of tourism activity in Palmerston North.

Table 11: Palmerston North Industry Sector Growth Rate Indicators Ranked by Annual Earnings

Health Care and Social Assistance Education and Training Public Administration and Safety Logistics Retail Professional, Scientific and Technical Services Construction Manufacturing Other Services Administrative and Support Services Financial and Insurance Services Agriculture, Forestry and Fishing Rental, Hiring and Real Estate Services Information Media and Telecommunications Arts and Recreation Services Electricity, Gas, Water and Waste Services Unallocated Mining Total

Annual Average Growth Rates (2001 - 2015) GDP 3.5% -0.2% 5.1% 4.4% 3.9% 1.1% 3.4% 0.2% 2.9% 3.7% 1.5% 1.8% 2.8% 2.9% -0.8% -5.3% 3.6% 0.4% 2.7%

Jobs 1.8% 0.4% 2.4% 2.8% 1.1% 1.4% 2.6% -0.8% 1.5% 1.5% -1.0% 0.9% 0.7% -5.1% 0.5% -3.2% c 1.4%

2014 Annual earnings

Earnings 7.3% 3.2% 6.5% 6.0% 4.9% 4.6% 6.0% 2.1% 4.5% 6.2% 3.5% 1.1% 2.1% 0.6% 3.8% 0.5% -3.2%

$ million

4.7%

2,423

354 321 299 272 256 206 186 163 74 71 61 49 41 27 23 14 5

GDP - year ended Dec 2014, jobs as at February 2015, earnings for year ended March 2014 Source: Statistics New Zealand) business demography

Growth in industry sectors in Palmerston North between 2000 and 2015 was mostly correlated to national growth levels in each sector but there are some notable variations from the national trends. Key sectors for the City’s future growth: 1. Health Care and Social Assistance. This is a growth sector nationally, with 44 percent growth in the number of national employees between 2000 and 2015 and 159 percent growth in total earnings between 2000 and 2014. The increase in employee count in the sector in the City was 30 percent between 2000 and 2015, well below the growth rate for New Zealand. However, earnings growth in the City was 167 percent between 2000 and 2014, which was above the 159% increase for New Zealand. The earnings data is only available at a broad industry division level due to confidentiality constraints on the publication of the data but the employee count data is available at a more detailed level. The employee count data shows strong growth in residential care services in the City compared with the national trend. 2. Public Administration and Safety. This sector has also experienced strong growth nationally, with 52 percent growth in the number of national employees between 2000

23 and 2015 and 152 percent growth in total earnings between 2000 and 2014. The increase in employee counts in the sector in the City between 2000 and 2015 was 42 percent and earnings growth was 143 percent between 2000 and 2014. The Linton Military Camp is the largest source of employment in the sector. Other major employers include NZTA, the City Council, Horizons Regional Council, IRD, Police, Corrections, Ministry of Social Development (including WINZ, CYF and Study Link) and Immigration. 3. Logistics: Transport, Postal and Warehousing, Wholesale Trade. Employment growth in the New Zealand logistics sector has been weaker than for the overall economy, with the number of jobs in the sector increasing by 11 percent between 2000 and 2015 and earnings increasing by 81 percent between 2000 and 2014. The sector has experienced strong growth in Palmerston North, with a 51 percent increase in employee counts in the sector and earnings growth of 127 percent. There was a 146 percent increase in City earnings in the transport, postal and warehousing sector and a 118 percent increase in the wholesale trade sector.

Table 12: Distribution of Employment by Sector Employee Counts

Earnings

Palmerston Palmerston Industry sector New Zealand North New Zealand North Agriculture, Forestry and Fishing, Mining 6.0% 1.2% 5.8% 2.0% Manufacturing 10.7% 6.4% 10.8% 6.7% Electricity, Gas, Water and Waste Services 0.7% 0.3% 0.9% 0.6% Construction 6.9% 6.7% 8.4% 7.7% Retail 16.9% 16.8% 9.4% 10.6% Logistics 9.5% 10.8% 10.5% 11.2% Information Media and Telecommunications 1.8% 0.9% 2.5% 1.1% Financial and Insurance Services 2.8% 1.8% 4.5% 2.5% Rental, Hiring and Real Estate Services 1.5% 1.3% 2.6% 1.7% Professional, Scientific and Technical Services 8.0% 5.5% 13.2% 8.5% Administrative and Support Services 5.0% 5.6% 3.6% 2.9% Public Administration and Safety 5.7% 10.6% 6.0% 12.4% Education and Training 8.5% 12.0% 7.5% 13.3% Health Care and Social Assistance 10.8% 14.4% 9.8% 14.6% Arts and Recreation Services 1.9% 1.8% 1.3% 1.0% Other Services 3.3% 3.7% 2.9% 3.1% Not elsewhere classified 0.3% 0.2% Total Industry 100.0% 100.0% 100.0% 100.0% Note: Tourism encompasses a range of industry sectors so does not align with a single ANZSIC industry Source: Statistics New Zealand Business Demography and LEED

4. Retail / Tourism. Palmerston North has not traditionally been recognised as a significant tourist destination, but Ministry of Business, Innovation and Employment (MBIE) annual tourism expenditure estimates suggest Palmerston North was ranked 10th overall for total tourism expenditure in New Zealand and 7th for domestic visitor expenditure in the year ended March 2015. Retailing accounts for the largest share of tourism sector employment. Job growth in the City’s retail sector has been weaker than the average for the New Zealand retail sector, with City retail sector jobs increasing by 17 percent between 2000 and 2015 compared with national growth of 25 percent. However, City earnings in the retail sector increased by 97 percent between 2000 and 2014, ahead of national earnings growth of 93 percent. 5. Professional, Scientific and Technical Services. The professional, scientific and technical services sector covers a range of diverse services. A key sector for the City is research, with the Fonterra, AgResearch, Plant and Food and Landcare research

24 institutes the largest research organisations in the City. The largest number of research staff in the City is based at Massey University, but they are included in the education sector employee counts. Job growth in the sector has been weaker than the average for New Zealand, with City jobs increasing by 23 percent between 2000 and 2015 compared with national growth of 81 percent. However, City earnings growth of 81 percent between 2000 and 2014 was closer to national earnings growth of 138 percent. 6. Education. Education is not a major growth sector for the City, with earnings growth in the City of 54 percent between 2000 and 2014, below the City average of 91 percent and jobs growth of 6 percent between 2000 and 2015, below the City average of 20 percent. Employment growth in the education sector in New Zealand was 31 percent over this period. However, the education sector has been cited as an important factor in the location of the growth sectors in the City. In addition, the education sector is important to the City because it contributes 13.3 percent of Palmerston North earnings, a significantly higher share than the average for New Zealand of 7.5 percent.

Statistics New Zealand National Labour Force Projections 2015 – 2068 The New Zealand labour force is projected (medium projections) to increase from 2,492,000 in 2015 to 2,998,000 by 2043, an increase of 506,000 jobs (20 percent increase). The national population is projected to rise by 1,129,000 people over that time, an increase of 25 percent. The Statistics New Zealand medium labour force projection is based on assumptions of a medium fertility rate of 1.95 in 2015, declining to 1.9 by 2030 and beyond, a medium mortality rate (medium life expectancy in 2043 of 85.5 years for males and 88.7 years for females), medium net migration (net 12,000 positive annual gain beyond 2017) and a decline in labour force participation. The average working life for males to age 80 years is projected to rise from 46 years in 2015 to 48 years by 2043. The average working life for females to age 80 years is projected to rise from 39 years in 2015 to 42 years in 2043. The medium age of the labour force (aged 15 years and older) is projected to rise from 42.7 years in 2015 to 44.3 years by 2043 while the median age for the population is projected to rise from 37.3 years in 2015 to 42.7 years by 2043. The overall median age for the total population is projected to rise from 37.5 years in 2013 to 42.7 by 2043. The projections indicate that New Zealand is currently near peak labour force participation, and this is likely to fall over the coming decades. In recent years, 68–69 percent of adults (aged 15 years and over) were in the labour force. The median projection indicates a gradual drop to 64 percent in 2038 and to 62 percent in 2068. This drop is despite the assumptions of static or increasing labour force participation rates at most ages. This apparent paradox is caused by the changing age structure of the population, which sees strong growth in the number and proportion of the population at the oldest ages, where employment participation rates are at their lowest.

Palmerston North Employment Growth Projections 2013 - 2043 Employment projections are prepared by the Council using an average annual change in the number of jobs rather than the annual average percentage rate of growth to project future employment levels. Using an average annual percentage growth rate to project future employment growth would result in a compounding rate of increase in the number of jobs created. However, this would be divergent to the Statistics New Zealand projections for the rate of population increase, which is expected to gradually slow over the 30-year projection period. Projecting the increase in total employment, based on the average annual

25 percentage growth rate, does not appear realistic compared with the projected increase in total population. Adjustments made to this simple growth formula are: a) the Council’s projected employment change for the health and education sectors has been adjusted, based on the Statistics New Zealand 2015 long-term population projections (2013-base) for the 0 – 14 years population (education sector employee counts) and the 65 years and over population (health care and social assistance sector employment). b) Some ad hoc adjustments have also been made to the historic employment count data, to reflect changes in employment over the 2000 – 2015 period that were not likely to be repeated. Examples of these include the impact of the reduction in Electricity, Gas, Water and Waste Services employment due to the sale of the City Council electricity company, and significant losses in manufacturing employment during the 2000 to 2012 period. The closure of the Ralta/Sunbeam manufacturing plant was one of the largest manufacturing plant closures during this period. The employment change data for the period between 2000 and 2015 reflects the impact of the 2008/09 global financial crisis, which ended a sustained period of strong economic growth in New Zealand and in Palmerston North. Over the 2000 - 2008 period, annual average employee count growth in Palmerston North was 2.4% and real GDP growth was 2.4%. As a result of the impacts of the global financial crisis, annual average employee count change in the City was -0.5% between 2008 and 2014 and real GDP growth was 0.1%. It is inevitable there will be further economic shocks during the 30 year projection period, so no adjustment has been made to discount the impact of the 2009 Global Financial Crisis. As noted earlier, Statistics New Zealand medium growth population projections suggest the City may reach a population of 98,800 by 2043, an increase of 15,300 (18.3 percent) from 2013. The medium growth employment projections prepared for the City suggest that employment could rise by 21,028 by 2043, a 45.8 percent increase from 2013 employment levels. This is higher than the medium national labour force projections released by Statistics New Zealand. The Department’s medium growth population projection for New Zealand is for a 25 percent increase from 2014 to 2043 while the labour force is projected to rise by 20 percent between 2015 and 2043. The Palmerston North projections are based on an assumption that there will be an ongoing increase in labour force participation levels among the population aged 65 and over. The low median age of the Palmerston North population also offers greater potential for stronger increases in work force participation rates compared to the trend for New Zealand. Statistics NZ has projected that the median age of the Palmerston North population will be 37.0 years by 2043, still younger than the national median age of 37.3 at the time of the 2013 Census, when the labour force participation rate is thought to have been close to peak. The median age in Palmerston North will be much lower than the projected median age for New Zealand of 42.7 by 2043. The projected employment growth requires a further increase in labour force participation rates, particularly in the 65 years and over age group and an increase in the number of people commuting to work from outside the City. An increase in participation rates could be achieved by: 1. Further reduction in Ministry of Social Development beneficiary numbers. Beneficiary numbers in Palmerston North declined from 7,995 in December 2000 to 6,380 in December 2015, a decline of 1,615 people, a reduction of 108 people a year. 2. A reduction in the proportion of tertiary students in the total population. Tertiary student numbers are expected to decline in New Zealand over the next five years and

26 will then increase more slowly than overall population growth due to weak growth in the number of young people. 3. A further increase in labour force participation by people aged 65 and over. The participation rate for Palmerston North residents aged 65 and over increased from 11 percent in 2001 to 21 percent in 2013. The number of residents aged 65 years and over who were employed rose from 879 people in 2001 to 2,163 in 2013. The number in full-time employment increased from 381 in 2001 to 1,086 in 2013, an increase of 185 percent. 4. Further increases in female labour force participation. Between 2001 and 2013 the number of Palmerston North residents employed increased by 8.2 percent. Female employment increased by 11 percent while male employment increased by 5.5 percent. Growth in City employment will also continue to exceed population growth if there is continuing growth in the number of people commuting to work in Palmerston North from the local authorities surrounding the City. The divergence between house prices in the City and the local authorities surrounding the City has widened, contributing to stronger population growth in these areas.

Table 13: Usual Residence of People who work in Palmerston North (Census 2013) Place of Residence

Number

Palmerston North City Manawatu District Horowhenua District Tararua District Rangitikei District Wanganui District Kapiti Coast District Wellington City Total non-residents identified Other areas / not defined Total Palmerston North workforce

31,425 4,719 1,260 507 492 315 147 84 7,524 771 39,720

% share 79.1% 11.9% 3.2% 1.3% 1.2% 0.8% 0.4% 0.2% 18.9% 1.9% 100.0%

Source: Census 2013

Table 14: Palmerston North Employment and Population Growth Projections Medium Projection for 2043 Growth scenario

2013 - 2043 change Population

Employment

Population

Employment

Number

Number

Number

%

Number

%

Low

51,656

86,500

1,500

1.8%

4,003

8.4%

Medium

66,498

98,800

15,300

18.3%

20,568

44.8%

High

73,587

111,800

28,300

33.9%

27,657

60.0%

Source: Palmerston North City Council / Statistics NZ

Medium Growth Employment Projections for Palmerston North The medium growth employment projections are based on the level of employment growth achieved over the period from 2000 to 2015. These have been adjusted using the Statistics

27 New Zealand medium population projections, which suggest a slowing in the City population growth rate over the period from 2013 to 2043.

Table 15: Palmerston North City - Medium Employment Growth Projections (Based on estimates for employment growth by ANZSIC Division 1)

2013

2043

Growth 2013 - 2043 Annual average growth % rate

Actual

Projected

Number

500 12 2,820 170 3,110 4,980 7,910 470 730 580 2,540 2,490 4,710 5,530 6,920 770 1,660

589 36 3,310 240 5,170 8,480 10,130 489 967 720 3,510 3,640 7,930 6,280 11,657 940 2,410

89 24 490 70 2,060 3,500 2,220 19 237 140 970 1,150 3,220 750 4,737 170 750

17.7% 200.0% 17.4% 41.2% 66.2% 70.3% 28.1% 4.1% 32.5% 24.1% 38.2% 46.2% 68.4% 13.6% 68.5% 22.1% 45.2%

0.5% 3.7% 0.5% 1.2% 1.7% 1.8% 0.8% 0.1% 0.9% 0.7% 1.1% 1.3% 1.8% 0.4% 1.8% 0.7% 1.3%

Total Employment

45,930

66,498

20,568

44.8%

1.2%

Population (Medium Growth)

83,500

98,800

15,300

18.3%

0.6%

Employment share of population

55.0%

67.3%

Agriculture, Forestry and Fishing Mining Manufacturing Electricity, Gas, Water and Waste Services Construction Logistics Retail Information Media and Telecommunications Financial and Insurance Services Rental, Hiring and Real Estate Services Professional, Scientific and Technical Services Administrative and Support Services Public Administration and Safety Education and Training Health Care and Social Assistance Arts and Recreation Services Other Services

Source: Palmerston North City Council

The projections suggest employment growth of 686 jobs per annum, an increase of 20,568 jobs between 2013 and 2043, an annualised increase of 1.2 percent. The projections were prepared at an industry level, with an analysis of whether each sector was likely to: a. Achieve a similar level of employment growth to that achieved between 2000 and 2015. b. Achieve faster employment growth than population growth. Factors that will contribute to this are: I.

Service sector providers are becoming more concentrated in larger urban areas. Some services are provided to just the local community while other services are provided to the much wider regional area.

II.

The health sector has experienced an expansion in services offered and significant increases in funding and is growing faster than population growth. Central government funding for the health sector has been increasing at a faster rate than GDP growth.

III.

The residential care sector will grow because of the ageing of New Zealand’s population and increases in the number of people with other disabilities. It is a labour intensive sector so will be an important contributor to future employment

28 growth. Employment in residential care services in Palmerston North increased by 68 percent between 2000 and 2015. The City’s population aged 65 years and over is projected to increase from 10,900 in 2013 to 20,100 by 2043. The rate of growth in the 65 years and over population slows significantly after 2038. c. Be affected by external factors. An example is the impact of the ongoing removal of tariff protection on manufacturing sector employment. d. Increase at a similar level to population growth. For example, the very strong growth achieved in the construction sector between 2000 and 2007 is not likely to be repeated in future years and the sector is projected to increase more slowly than overall employment growth, but from a high base. Employment in education is limited by population growth. e. Remain stable or decline, for example agriculture, which will continue to decline due to reductions in the available land in the City, as the City’s industrial and residential zones expand into the existing rural zone.

Ageing Workforce As the population ages so too will the workforce. More people aged 65 years and over are tending to stay in the workforce, either in a part-time capacity or in full-time employment. In 2001 the workforce participation rate for people aged 65 and over was 11.1 percent of the 65 years and over population. The participation rate had increased to 21.4 percent by 2013. There was a 59 percent increase in the number of people aged 65 and over in full-time employment while part-time employment increased by only 13 percent. In 2001 the 65 and over age group accounted for only 2.4 percent of the workforce in the City, but by 2013 their share had increased to 5.4 percent. The growth in employment is primarily occurring in the 65 – 74 years age group. Between 2013 and 2043 the population aged 65 and over is predicted to increase by 84 percent compared with total population growth of 18 percent. The strongest rate of growth will be in the 75 years and over age group while the 65 – 69 years age group is expected to increase by 13 percent and the 70 – 74 age group is expected to increase by 64 percent. Further growth in the level of participation in employment for these age groups is likely to significantly increase their share of the total workforce in the City.

29

Household Projections Past and Current Housing and Household Trends Statistics New Zealand publishes Census data for the number of dwellings in each local authority and the number of households but projections are only prepared for change in the number of households and family type. There were 31,806 dwellings counted in the 2013 Census, an increase of 10.8 percent from 2001. The number of dwellings increased by 322 dwellings a year between 2001 and 2006 and by 215 dwellings a year between 2006 and 2013. The number of occupied non-private dwellings3 and empty dwellings4 increased at a faster rate of growth than the rate of increase for occupied dwellings, but the Census does not offer any information for the reasons contributing to this growth, since only limited information is collected on empty dwellings. The proportion of empty houses in the City (4.3 percent of total dwellings) was lower than the 9 percent share for New Zealand, reflecting the smaller number of holiday houses or second dwellings in the City compared with some areas of New Zealand. The proportion of ‘residents away’ dwellings in the City (2.1 percent) was also lower than the 2.8 percent share for New Zealand. Table 13: Occupied dwellings, unoccupied dwellings, and dwellings under construction in Palmerston North Number of dwellings Occupied private dwelling Occupied non-private dwelling Total occupied dwellings Unoccupied dwelling - residents away Unoccupied dwelling - empty dwelling Total unoccupied dwellings Dwellings under construction Total occupied and unoccupied private dwellings Source: Statistics New Zealand Census

2001

2006

2013

26,940

28,479

29,700

2001 - 2013 change 2,760

10.2%

156

120

189

33

21.2%

27,096

28,599

29,892

2,796

10.3%

603

687

624

21

3.5%

999

1,020

1,287

288

28.8%

1,599

1,707

1,917

318

19.9%

123

195

99

-24

-19.5%

28,695

30,303

31,806

3,111

10.8%

Palmerston North’s estimated number of households totalled 31,500 at 30 June 2013 but Census 2013 data for household change is based solely on the 29,600 households in occupied private dwellings. The difference between these two series is due to:    

net census undercount families and households temporarily overseas on census night families and households temporarily absent from their usual address but elsewhere in New Zealand on census night change between census night (5 March 2013) and 30 June 2015

3

A non-private dwelling provides short- or long-term communal or transitory type accommodation. Non-private dwellings are generally available to the public by virtue of employment, study, special need, legal requirement, or recreation. 4

A dwelling is defined as ‘unoccupied’ if it is unoccupied at all times during the 12 hours following midnight on the night of the Census and suitable for habitation. An unoccupied bach or holiday home is classified as an 'empty dwelling'

30 Household numbers should therefore not be confused with building activity or dwelling numbers. The household definition refers to private dwellings that are usually occupied5 by a person or group of people. Statistics New Zealand define a ‘household’ as being one person usually living alone, or two or more people usually living together and sharing facilities (eg. eating facilities, cooking facilities, bathroom and toilet facilities, a living area) in a private dwelling. The definition for households therefore excludes non-private dwellings, unoccupied dwellings and dwellings which are not the usual residence of people (eg. holiday homes, second homes). Annual estimates for the number of households or families are not prepared by Statistics New Zealand so the latest data available is for 2013. In 2013 189 occupied non-private dwellings in Palmerston North accommodated around 2,500 people, around 3 percent of the City’s population. Table 17: Number of Palmerston North residents in occupied non-private dwellings, March 2013 Educational institution 1,200 Residential care for older people

690

Defence establishment

276

Residential and community care facilities

195

Prison or penal institution

147

Welfare institution

6

Total

2,514

Source: Statistics New Zealand Census

The average number of bedrooms in dwellings in the City is increasing, rising from 3.1 bedrooms in 2001 to 3.2 bedrooms in 2013. This is primarily due to an increase in the number of larger dwellings constructed or the addition of bedrooms to existing dwellings. Unfortunately, there was an increase in the number of households that did not provide data on the number of rooms in the 2013 census, limiting the accuracy of change in the size of dwellings between 2006 and 2013. Table 18: Number of bedrooms, for occupied private dwellings in Palmerston North One Tw o Three Four Five Six Seven Bedroom Bedrooms Bedrooms Bedrooms Bedrooms Bedrooms Bedrooms

Eight or Total Mean Bedrooms More dw ellings Number of not stated Bedrooms stated Bedrooms

2001

1,212

5,310

11,883

5,757

1,350

276

84

108

25,980

963

3.1

2006

1,281

5,415

12,420

6,660

1,479

285

66

66

27,675

804

3.1

2013

3.2

1,308

5,310

12,348

7,272

1,647

321

81

54

28,335

1,365

2001 - 2006 change

69

105

537

903

129

9

-18

-42

1,695

-159

2006 - 2013 change

27

-105

-72

612

168

36

15

-12

660

561

Source: Statistics New Zealand Census

Palmerston North has slightly larger dwellings than the average for New Zealand (3.2 bedrooms in 2013 in Palmerston North compared to 3.1 for New Zealand) but the number of people per household is slightly less in the City (2.6 people in Palmerston North in 2013 compared with an average of 2.7 for New Zealand).

5

A dwelling is defined as ‘occupied’ if it is occupied at midnight on the night of the Census or occupied at any time during the 12 hours following midnight on the night of the Census unless the occupant(s) completed a questionnaire at another dwelling during that period.

31

Source: Statistics New Zealand Census

Statistics New Zealand Family and Household Projections 2013 2038 The total number of households in Palmerston North is projected to increase from 31,500 in 2013 to 38,400 by 2038, an average annual increase of 0.8 percent. The rate of growth in the number of households is projected to slow over the 25 year projection period, reflecting the projected slowing in population growth during this period.

Table 19: Projected Average Annual Growth Rate by 5-year Period Number of households at 30 June Territorial authority area Palmerston North Average annual change Average annual grow th rate New Zealand Average annual change Average annual grow th rate

2013

2018

2023

2028

2033

2038

31,500

33,100

34,500

36,000

37,300

38,400

320

280

300

260

220

1.0%

0.8%

0.9%

0.7%

0.6%

1,648,500 1,782,700 1,885,400 1,982,600 2,071,000 2,144,000 26,840

20,500

19,480

17,700

14,600

1.6%

1.1%

1.0%

0.9%

0.7%

Source: Statistics New Zealand subnational family and household projections: 2013(base) - 2038

Average household growth in the City is projected to be 320 households between 2013 and 2018 but is projected to decline to 220 a year between 2033 and 2038. The number of new dwelling building consents issued by the Council needs to be higher than this to allow for the demolition of houses and the transfer of houses to other areas. Projected household formation in New Zealand is projected to slow more quickly from an average of 26,840 households between 2013 and 2018 to 14,600 a year between 2033 and

32 2038. This is also reflected in the population projections for New Zealand, which show average annual growth slowing from 1.6 percent between 2013 and 2018 to 0.7 percent between 2033 and 2038. Average annual population growth in Palmerston North is projected to slow from 1.0 percent to 0.6 percent over this time period.

Table 20: Projected Palmerston North households by projection scenario Households at 30 June(3) Projection

Change 2013–38 Average Number annual (percent)

2013

2018

2023

2028

2033

2038

High

31,500

33,800

36,000

38,300

40,500

42,700

11,200

1.2

Medium

31,500

33,100

34,500

36,000

37,300

38,400

6,900

0.8

Low 31,500 32,400 33,000 33,600 34,100 34,300 2,800 0.3 Source: Statistics New Zealand subnational family and household projections: 2013(base) - 2038

Alternative high growth and low growth projections suggest household growth may vary between an additional 2,800 households over the 25-year projection period or 11,200 households. Table 21 provides information relating to projected families and households by type under the medium growth series for Palmerston North City. The average household size for Palmerston North is expected to decline from 2.6 people in 2013 to 2.4 people by 2038. The family household is by far the most common household type for both Palmerston North City and all of New Zealand – accounting for 72 percent of all New Zealand households in 2013 and 68 percent of households in Palmerston North. Palmerston North has a higher share of multi-person households (6.3 percent in 2013) compared with New Zealand (4.2 percent) reflecting the higher number of students living in the City. Table 21: Projected families and households by type (medium series) for Palmerston North City: 2013(base) - 2038 Family type Year at 30 June

Couplew ithoutchildren

Tw oparent

Oneparent

Household type Total

Family

Other multiperson

Oneperson

Total

Average household size

2013

9,000

8,500

4,600

22,100

21,400

2,000

8,000

31,500

2.6

2018

9,900

8,600

4,700

23,200

22,300

2,100

8,700

33,100

2.5

2023

10,600

8,700

4,800

24,100

23,200

2,000

9,300

34,500

2.5

2028

11,100

9,000

4,900

25,000

23,900

2,000

10,000

36,000

2.5

2033

11,500

9,300

5,100

25,900

24,600

2,000

10,600

37,300

2.4

2038

11,900

9,500

5,200

26,600

25,200

2,000

11,200

38,400

2.4

% share of families

% share of households

2013

40.7%

38.5%

20.8%

100.0%

67.9%

6.3%

25.4%

100.0%

2018

42.7%

37.1%

20.3%

100.0%

67.4%

6.3%

26.3%

100.0%

2023

44.0%

36.1%

19.9%

100.0%

67.2%

5.8%

27.0%

100.0%

2028

44.4%

36.0%

19.6%

100.0%

66.4%

5.6%

27.8%

100.0%

2033

44.4%

35.9%

19.7%

100.0%

66.0%

5.4%

28.4%

100.0%

2038 44.7% 35.7% 19.5% 100.0% 65.6% 5.2% 29.2% 100.0% Source: Statistics New Zealand subnational family and household projections: 2013(base) - 2038

33 The number of couples without children is projected to increase by 2,900 between 2013 and 2038, an average annual increase of 1.1 percent. The number of families with children will continue to increase between 2013 and 2038, with one-parent families increasing by 0.5 percent on an average annual basis while the number of two-parent families is projected to increase by 0.4 percent. The most recent projections in 2010 projected that the number of two-parent families would decline by 0.2 percent on an average annual basis. One-person households in the City are projected to record the strongest growth between 2013 and 2038, increasing by 3,200 between 2013 and 2038, an annual average growth rate of 1.4 percent. One-person households will account for a greater share of households in 2038 compared with 2013, increasing from 25 percent of total households in 2013 to 29 percent by 2038. Population growth is expected to slow over the next 25 years but household growth is not expected to slow to the same extent because of the faster growth in the number of oneperson households.

Source: Statistics New Zealand population and household projections

Distribution of household growth in Palmerston North Residential development in Palmerston North is classified under three categories: 

Greenfield – new houses built on previously undeveloped land zoned for residential development.



Infill – houses built on land subdivided in the existing urban area.



Rural / Rural-residential – all residential development in the rural zone. “Lifestyle” blocks, generally of around 1 - 4 ha.

Includes

Over the sixteen-year period from 1999 to 2014, residential development averaged 128 dwellings a year on greenfield sites (50 percent of the total), infill housing accounted for 78

34 dwellings (30 percent), apartments/ retirement village/ other dwellings6 accounted for 21 dwellings (8 percent) and rural / residential 31 dwellings (12 percent of the total). While these percentages may change as a result of the District Plan review it is possible to estimate the likely distribution of new housing development based on the current rules. It should be noted there are differences between the data for the number of new dwelling consents and the growth in the number of households because of an ongoing loss of dwellings, for example, through the expansion of commercial construction in former inner city residential zones. It should be noted that consents for residential apartments are currently excluded from the residential growth data below. Table 22: New dwelling units by development type (1999 - 2014) Total Estimated Apartments Building Net /Retirement Year Ended Consents Dwelling Village/ (December) (Authorised) change Greenfield Other 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Average 1999-2014

263 227 249 305 361 412 377 445 346 234 209 207 183 171 221 161

244 215 242 281 352 409 347 426 325 231 187 172 161 150 211 145

number 111 123 138 151 168 241 221 239 151 96 115 69 57 44 70 55

273

256

128

Infill

Apartments /Retirement Rural/RuralVillage/ Residential Greenfield Other

12 28 17 16 11

96 58 71 84 100 107 95 84 92 56 49 61 63 68 101 57

37 34 33 46 50 49 31 43 14 28 23 30 13 21 24 22

19

78

31

34 12 60 68 51

Infill

Rural/RuralResidential

Percentage share of net dwelling consents 45% 0% 39% 15% 57% 0% 27% 16% 57% 0% 29% 14% 54% 0% 30% 16% 48% 10% 28% 14% 59% 3% 26% 12% 64% 0% 27% 9% 56% 14% 20% 10% 46% 21% 28% 4% 42% 22% 24% 12% 61% 0% 26% 12% 40% 7% 35% 17% 35% 17% 39% 8% 29% 11% 45% 14% 33% 8% 48% 11% 38% 8% 39% 15% 50%

8%

30%

12%

Source: PNCC annual building consent monitoring data

Applying this 10-year average preference to the projected 2013 – 2038 household growth data gives the following projected requirements for lots in the four categories.

Table 23: Projected household change by development type (2013 - 2038) 1999 - 2014 average Household increase Total household change household share per year (2013 - 2038) Total net dwelling change

100%

276

6,900

Greenfield

50%

138

3,450

8%

21

520

Infill

30%

84

2,091

Rural/Rural-Residential

12%

34

839

Apartments/ retirement village/ other

Source: Statistics New Zealand and Palmerston North City Council residential growth reports

6

Includes townhouses, units, granny flats and self-contained sleepouts

35

Ethnicity Past and Current Ethnic Trends7 Palmerston North experienced significant change in the ethnic diversity of its population between 1996 and 2013 and further significant ethnic change is projected by Statistics New Zealand over the period from 2013 to 2038. Census data shows that between 1996 and 2013 the City recorded strong growth in its Māori (40 percent increase), Asian (96 percent increase) and Pacific (68 percent increase) populations. The remaining population for the European and other ethnic groups declined slightly over the 17 year period. National Māori population growth was 21 percent between 1996 and 2013 so the 40 percent increase in the City was significantly stronger than the national growth rate. In 1996 the proportion of Māori people living in the City was 13.2 percent of the total City population, which was lower than the national average of 15.4 percent. By 2013 it had increased to 17.1 percent, above the national average of 15.6 percent. Two factors appear to have contributed to the strong growth in the Māori population in Palmerston North over this period. Firstly, the high numbers of Māori employed at Linton Military Camp and a major expansion of the number of staff employed at the camp since the early 1990’s have been important for bringing increased numbers of Māori into the City. Secondly, a significant increase in Māori participation in tertiary education is also a factor in the increased Māori population growth in Palmerston North between 1996 and 2013. There are high Māori populations in the catchment regions for the tertiary institutions based in Palmerston North, so increased participation in tertiary education by Māori increases the level of migration by young Māori people to the City. In 2013 the Manawatū-Whanganui region had a 21 percent Māori population share, Taranaki a 17 percent share and Hawkes Bay a 24 percent share. Currently the major ethnic groups in Palmerston North are as follows: Table 24: Ethnic population, 1996 - 2013 change Ethnic Group

1996 – 2013 change Number % -100 0% 4,100 40% 1,570 68%

1996

2001

2006

2013

European and other Māori Pacific peoples

66,800 10,200 2,300

65,300 10,750 2,470

66,600 12,700 3,100

66,700 14,300 3,870

Asian Middle Eastern /Latin American/ African Total Population

4,370

4,970

6,150

8,550

4,180

96%

550

570

870

1,080

530

96%

77,100

77,100

80,800

83,500

6,400

8%

Note: the total for the four ethnic components is greater than the total population. Source: Statistics New Zealand ethnic population estimates

The ethnic concept used in the Statistics New Zealand subnational ethnic population projections is the ethnic group or groups that people identify with or feel they belong to. Ethnicity is self-perceived and people can belong to more than one ethnic group. For example, people can choose to identify with the Māori ethnicity even though they may not be descended from a Māori ancestor. Conversely, people may choose to not identify with the Māori ethnicity even though they are descended from a Māori ancestor. Ethnicity does not equate to a birthplace description. The Census allows more than one ethnic group to be identified. 7

Sources: Oasis 5916081 and 5956195

36

Table 25: Ethnicity by age group (2013) Ethnic Group

0–14 years

15–39 years

40–64 65 years Total years and over population

European or Other (including New Zealander)

78.4%

75.0%

82.7%

90.8%

79.9%

Māori

29.3%

19.0%

11.9%

5.0%

17.1%

Asian

10.6%

13.9%

7.9%

4.4%

10.2%

Pacific Middle Eastern/Latin American/African

8.7%

5.2%

2.6%

1.2%

4.6%

1.6%

1.7%

1.0%

0.2%

1.3%

Note: Percentages add to more than 100 percent. Source: Statistics New Zealand ethnic population estimates

Table 25 and figure 22 show the scale of the change which is already taking place in the ethnicity of younger age components of the City’s population and gives an indication of the level of ethnic change which is likely to occur without any additional contribution from migration.

Source: Statistics New Zealand ethnic population estimates

In 2013 Māori represented 17.1 percent of the City population but their share of the City population in the 0 – 14 age group was 29.2 percent. The children who were aged 0 – 14 at the time of the 2013 Census will contribute to significant growth in the City Māori population, increasing the Māori share of the 15 – 64 age group and also further increasing the number of Māori births in the City. The very young median ages in 2013 for the Māori (22.0 years) and the Pacific (20.5 years) populations compared to 27.9 years for the Asian and 35.4 years for the European and other ethnic populations is a significant contributor to the higher

37 percentage shares projected for the Māori and Pacific populations in the 0 – 14 age group by 2038.

Statistics New Zealand ethnic population projections (2013 – 2038) The latest Statistics New Zealand projections suggest Palmerston North will continue to become more ethnically diverse in the future. The European and Other ethnic group made up 80 percent of the total population at the time of the 2013 Census, but this is expected to decline to 70 percent by 2038. The average annual growth rate for the overall City population is expected to be 0.6 percent over the 25 year period but the annual average growth rate for the European and Other ethnic group is projected to be 0.05 percent over this period. There is projected to be an increase of just 800 people in the European and Other ethnic group while the total City population increase is projected to be 13,400 people. The fastest rate of growth (percentage increase) for the four major ethnicities in the City is expected to be for Pacific people, with annual average percentage growth of 3.2 percent, resulting in an increase from a population of 3,870 in 2013 to 8,410 by 2038, increasing to 8.7 percent of the City population. By 2038 25.6 percent of the Palmerston North City population is projected to be Māori and the ethnic group is projected to have an average annual growth rate of 2.2 percent, increasing by 10,500 people between 2013 and 2038, reaching 24,800 people by 2038. The Asian population is also projected to increase strongly, increasing by 7,950 between 2013 and 2038, an average annual increase of 2.7 percent. By 2038 Asians are projected to have a 17 percent share of the City population, with a population of 16,500 people.

Table 26: Ethnic population - projected 2013 - 2018 change 2013

2038

European and other

66,700

67,500

Māori

14,300

24,800

10,500

73%

17.1%

25.6%

Asian

8,550

16,500

7,950

93%

10.2%

17.0%

Pacific

3,870

8,410

4,540

117%

4.6%

8.7%

83,500

96,900

13,400

16%

100.0%

100.0%

Ethnic Group

Total Population

2013 - 2038 change Number % 800 1%

Percentage share 2013 2038 79.9% 69.7%

Note: the total for the four ethnic components is greater than the total population Source: Statistics New Zealand ethnic population projections

The number of people identifying themselves with two or more ethnic categories is also projected to increase significantly. This is a blunt indication of the levels of inter-relational ethnic integration, and we will likely see more faces in the City that display more than one ethnic characteristic in the future. In 2013 the total number of ethnicities recorded was nearly 12 percent higher than the total population and by 2038 they are projected to be 21 percent higher than the total population. Māori and Pacific people’s population growth has been primarily sustained by higher birth rates while Asian growth in the City has been sustained more by immigration in the past. However, the contribution from Asian births is expected to increase over the next 15 years. Māori net migration is expected to be negative over the period from 2013 to 2038, with a net loss averaging 20 people a year. This is consistent with national net migration data for Māori which suggests there will be a national net loss of 800 Māori people a year as a result of migration.

38 Pacific population growth will be primarily sustained by strong net natural increase due to the very low median age for the Pacific population. Growth will also be supported by positive net migration of 50 people a year. Asian population growth will be sustained by ongoing strength in net migration, with net migration of 260 people a year between 2013 and 2018 and 170 people a year between 2018 and 2038. Government decisions on the size of the total annual refugee intake, the source of refuges and the proportion of the annual intake that is settled in Palmerston North will play an important role in future population growth in the City.

Source: Statistics New Zealand ethnic population projections

Table 27: Projected ethnic population change in Palmerston North for 0 - 14 years population

Year

Projected 0 - 14 years Ethnic Population Percentage Share (number) Pacific European Māori Asian Island Total European Māori Asian

1996

13,400

3,600

990

2001

13,400

3,900

2006

13,100

4,400

2013 (base)

13,100

2018

Pacific Island

870

16,100

83.2%

22.4%

6.1%

5.4%

1,010

930

16,200

82.7%

24.1%

6.2%

5.7%

1,100

1,150

16,300

80.4%

27.0%

6.7%

7.1%

4,900

1,770

1,460

16,700

78.4%

29.3%

10.6%

8.7%

12,600

5,250

2,350

1,860

16,900

74.6%

31.1%

13.9%

11.0%

2023

12,300

5,550

2,850

2,250

17,000

72.4%

32.6%

16.8%

13.2%

2028

12,000

5,900

3,100

2,470

16,800

71.4%

35.1%

18.5%

14.7%

2033

12,100

6,400

3,050

2,650

17,000

71.2%

37.6%

17.9%

15.6%

2038

11,900

7,000

3,000

2,920

17,100

69.6%

40.9%

17.5%

17.1%

Source: Statistics New Zealand ethnic population projections

39 Table 28: Summary of ethnic poulation projections for Palmerston North Population(2) by age group (years) at 30 June

Projected components of population change, five years ended 30 June Total

Median age(4) (years) at 30 June

100 100 100 100 100

-1,500 1,300 100 400 300 300 100 -300

35.4 34.9 34.8 35.5 36.1 36.5

350 400 400 500 500

550 1,950 1,600 1,800 1,950 2,050 2,200 2,500

21.8 23.0 24.0 24.9 26.1 27.2

1,300 850 850 850 850

-50 -50 -50 -50 -50

600 1,180 2,400 2,050 1,600 1,500 1,400 1,400

27.9 28.6 29.8 30.6 31.9 33.0

... ... ... .. 590

... ... ... .. 250

... ... ... .. -20

170 630 770 820

20.5 20.2

70 90 100 120

620 650 720 840

250 250 250 250

-20 -30 -30 -40

850 870 950 1,050

20.0 20.0 21.0 22.1

... ... ...

... ... ...

... ... ...

... ... ...

0 3,700

Natural Net Inter-ethnic increase migration mobility (3)

Year

0–14

15–39

40–64

65+

European 1996 2001 2006 2013 (base) 2018 2023 2028 2033 2038

13,400 13,400 13,100 13,100 12,600 12,300 12,000 12,100 11,900

29,600 26,100 25,300 23,700 24,500 25,200 25,700 25,200 24,700

16,200 17,800 19,600 20,100 18,800 17,500 15,800 15,600 15,500

7,600 8,000 8,600 9,900 11,100 12,500 14,200 14,900 15,400

66,800 65,300 66,600 66,700 67,100 67,400 67,700 67,800 67,500

Māori 1996 2001 2006 2013 (base) 2018 2023 2028 2033 2038

3,600 3,900 4,400 4,900 5,250 5,550 5,900 6,400 7,000

5,000 5,050 5,750 6,000 6,700 7,600 8,500 9,300 9,900

1,350 1,600 2,200 2,900 3,400 3,800 4,200 4,700 5,400

200 200 350 550 750 1,100 1,500 2,000 2,500

10,200 10,750 12,700 14,300 16,100 18,050 20,100 22,300 24,800

Asian 1996 2001 2006 2013 (base) 2018 2023 2028 2033 2038

990 1,010 1,100 1,770 2,350 2,850 3,100 3,050 3,000

2,510 2,640 3,390 4,380 5,050 5,100 5,350 5,850 6,550

760 1,130 1,370 1,920 2,450 3,100 3,600 4,050 4,250

100 190 280 480 750 1,150 1,650 2,200 2,750

4,370 4,970 6,150 8,550 10,600 12,200 13,700 15,100 16,500

850 900 850 800 850

50 100 100 150 250

800 800 700 650 600

Pacific Island 1996 870 2001 930 2006 1,150 2013 (base) 1,460 2018 1,860

1,070 1,110 1,400 1,640 1,870

320 370 470 640 760

40 50 70 130 210

2,300 2,470 3,100 3,870 4,690

... ... ... .. 650

... ... ... .. 60

2,080 2,490 2,960 3,440

910 1,050 1,240 1,450

290 400 510 600

5,540 6,410 7,360 8,410

690 740 830 960

Total Population 1996 16,100 35,100 18,100 2001 16,200 32,200 20,400 2006 16,300 32,500 22,800

7,800 8,400 9,200

77,100 77,100 80,800

... ... ...

2013 (base) 16,700 31,600 24,300 10,900

2023 2028 2033 2038

2,250 2,470 2,650 2,920

All ages Births Deaths

4,300 4,400 4,400 4,300 4,200

1,800 1,950 2,100 2,300 2,500

2,600 2,600 2,700 2,900 3,100

250 300 300 400 500

1,700 1,700 1,700 1,500 1,100

1,550 1,650 1,700 1,900 2,000

-1,500 -1,500 -1,500 -1,500 -1,500

-100 -100 -100 -100 -100

83,500

..

..

..

..

..

2,700

33.4

2018

16,900 33,200 24,000 12,700

86,800

5,600

2,800

2,800

500

..

3,300

33.5

2023

17,000 34,400 23,500 14,600

89,600

5,700

2,900

2,800

0

..

2,800

34.0

2028

16,800 35,700 22,700 17,100

92,300

5,800

3,100

2,700

0

..

2,700

34.9

2033 2038

17,000 35,800 23,400 18,600 17,100 35,900 24,200 19,800

94,700 96,900

5,800 5,800

3,300 3,600

2,500 2,200

0 0

.. ..

2,400 2,200

35.7 36.5

Source: Statistics New Zealand ethnic population projections