ANALYSIS OF THE KĀPITI COAST ECONOMY

ANALYSIS OF THE KĀPITI COAST ECONOMY Final Report Evidence Base November 2017

CONTENTS Introduction 1 Kāpiti Coast region 2 Kāpiti Coast Economy 11 Kāpiti Coast sectors 28 kāpiti Coast Infrastructure 43 Bibliography 47 TABLES Table 1. Usual residence and place of work, Kāpiti Coast, 2013 4 Table 2. Population change in benchmark areas and New Zealand, 2006 to 2016 6 Table 3. GDP, benchmark areas and New Zealand, 2016 and 10, 5 and 3 year change 11 Table 4. Employment, benchmark areas and New Zealand, 2015 and 10, 5 and 3 yr change 19 Table 5. Business size, Kāpiti Coast, 2006 and 2016 25 Table 6. Kāpiti Coast sector analysis 29 Table 7. Table 8. GDP and filled jobs in the construction sector - size, growth and LQ by benchmark area 36 GDP and filled jobs in the aged care sector - size, growth and LQ by benchmark area 39 Table 9. GDP and filled jobs in the retail sector - size, growth and LQ by benchmark areas 41

FIGURES Figure 1. Kāpiti Coast district 2 Figure 2. Kāpiti Coast district transport networks 3 Figure 3. Population of Kāpiti Coast and benchmark areas, 2016 5 Figure 4. Annual population change, 2001 2016 7 Figure 5. Population projection to 2043, Kāpiti Coast district 7 Figure 6. Age and sex profile, Kāpiti Coast, 2006 8 Figure 7. Age and sex profile, Kāpiti Coast, 2013 8 Figure 8. Age and sex profile, New Zealand, 2013 8 Figure 9. Population projections to 2043 by age group, Kāpiti Coast 9 Figure 10. Ethnic population, Kāpiti Coast and New Zealand, 2013 9 Figure 11. GDP change, 2001 2016 12 Figure 12. GDP change, 2006 2016 12 Figure 13. GDP change, 2011 2016 13 Figure 14. GDP change, 2013 2016 13 Figure 15. GDP per capita, 2016 14 Figure 16. GDP per capita, 2001 2016 14 Figure 17. GDP per capita change, 2006 2016 15 Figure 18. GDP per capita change, 2011 2016 15 Figure 19. Median annual household income, 2013 16 Figure 20. Median annual household income change, 2006 2013 16 Figure 21. Median annual personal income, 2013 17 Figure 22. Median annual personal income change, 2006 2013 17 Figure 23. Mean annual personal earnings, 2016 17 Figure 24. Mean annual personal earnings, 2000 2016 18 Figure 25. Mean annual personal earnings change, 2006 2016 18 Figure 26. Median annual earnings change, 2011 2016 18 Figure 27. Filled jobs on the Kāpiti Coast, 2001 2016 19 Figure 28. Filled jobs change, 2006 2016 20 Figure 29. Filled jobs change, 2011 2016 20 Figure 30. Filled jobs change, 2013 2016 20 Figure 31. GDP per employee, 2016 21 Figure 32. GDP per employee change, 2006 2016 21

Figure 33. GDP per employee change, 2011 2016 22 Figure 34. Businesses on the Kāpiti Coast, 2001 2016 23 Figure 35. Businesses on the Kāpiti Coast and benchmark areas, 2016 23 Figure 36. Business units change, 2006 2016 24 Figure 37. Business units change, 2011 2016 24 Figure 38. Change in number of Kāpiti Coast businesses by business size, 2006 2016 25 Figure 39. Self employed as a share of total employment, 2016 27 Figure 40. GDP by sector, Kāpiti Coast, 2016 30 Figure 41. GDP by sector share, Kāpiti Coast and New Zealand, 2016 31 Figure 42. GDP change (5yr and 10yr) by sector, Kāpiti Coast 32 Figure 43. Filled jobs by sector, Kāpiti Coast, 2016 33 Figure 44. Filled jobs change (5yr and 10yr) by sector, Kāpiti Coast 34 Figure 45. GDP and employment location quotients by sector, Kāpiti Coast, 2016 35 Figure 46. Change in filled jobs in the construction sector, benchmark area, 2001 2016 37 Figure 47. GDP and filled jobs by industry in the construction sector, Kāpiti Coast, 2016 37 Figure 48. Change in filled jobs in the aged care sector, benchmark area, 2001 2016 38 Figure 49. GDP and filled jobs by industry in the aged care sector, Kāpiti Coast, 2016 39 Figure 50. Change in filled jobs in the retail sector, benchmark area, 2001 2016 40 Figure 51. GDP and filled jobs by industry in the retail sector, Kāpiti Coast, 2016 42 Figure 52. Kāpiti expressway 43 Figure 53. Four roading projects 44 5

PREFACE This report has been prepared for Kāpiti Coast District Council by Jason Leung-Wai and Tim Borren from MartinJenkins (Martin, Jenkins & Associates Limited). MartinJenkins advises clients in the public, private and not-for-profit sectors, providing services in these areas: Public policy Evaluation and research Strategy and investment Performance improvement and monitoring Organisational improvement Employment relations Economic development Financial and economic analysis. Our aim is to provide an integrated and comprehensive response to client needs connecting our skill sets and applying fresh thinking to lift performance. MartinJenkins is a privately owned New Zealand limited liability company. We have offices in Wellington and Auckland. The company was established in 1993 and is governed by a Board made up of executive directors Kevin Jenkins, Michael Mills, and Nick Davis, plus independent directors Sir John Wells (Chair) and Hilary Poole.

INTRODUCTION This report has been prepared for Kāpiti Coast District Council (KCDC) by MartinJenkins. Purpose The purpose of the evidence base report is to provide a clear understanding of what the Kāpiti Coast economy currently looks like, how it is performing over time and against benchmark regions. This evidence base, along with discussions with key players will be used to present a picture or story of the Kāpiti Coast economy that will underpin and inform regional economic development activity. Scope The report: identifies, collates and presents economic evidence that describes the Kāpiti Coast economy and its economic performance over time, and relative to benchmark regions. explores the relevance of specific factors that influence the Kāpiti Coast economy, particularly transport changes, the high level of self-employment, and the older population demographic. Approach This evidence base report presents relevant information collated from existing literature and datasets. Sources of information include Statistics New Zealand, Infometrics,.id, and KCDC. Information has been identified, collated and presented in a consistent and cohesive manner. This Information is compared and contrasted over time and against benchmark districts in the Wellington region (Porirua, Lower Hutt and Wellington City), and Horowhenua. The report is intended as a repository of information. It does not attempt to infer analysis or solutions from the information. Format The report is broken into three sections looking at geography and population, economy and growth, and key sectors. 1

KĀPITI COAST REGION This section looks at the geography and demography of the Kāpiti Coast region. Geography The Kāpiti Coast district covers 731 square kilometres in the northwestern part of the greater Wellington region, and includes Kāpiti Island, about 5 kilometres off the coast. Kāpiti Coast is the northernmost district in the Wellington Region. It is situated 40 kilometres from Wellington city to the south and 70 kilometres from Palmerston North to the north. Figure 1. Kāpiti Coast district The district is linked to Wellington via State Highway 1 (SH1) for vehicles, and by rail, with frequent commuter trains travelling between Waikanae and Wellington. It is connected to Palmerston North via State Highway 56/57 and the railway line. Source: Google Maps There is a private-owned airport in Paraparaumu. Air New Zealand provides a daily service to Auckland while Sounds Air and Air2there provides daily services to Blenheim and Nelson as well as aircraft charter services. A recently completed expressway between Peka Peka and Mackay s crossing has improved travel times through the Kāpiti Coast district both north and south. Paraparaumu is the main town centre for 2

the Kāpiti Coast district. Other town centres include Waikanae, Ōtaki and Paekakariki. There are also relatively large communities at Raumati and Te Horo. There are other significant transport changes underway including the Ōtaki bypass and Transmission Gully. These new roads will change travel patterns through the district and have an impact on Kāpiti Coast businesses and residents. Live/Work People tend to work close to where they live. However, in the Wellington region, a large proportion of people work in other districts, usually Wellington City. This commute is supported by a strong public sector transport system (trains and buses) and an effective state highway network. Figure 2. Kāpiti Coast district transport networks Source: Google Maps. Source: Metlink The quality of the transportation system has an impact on where people decide to live and work. It also has an impact on where businesses locate. 3

Table 1 shows where people who live in Kāpiti Coast work and where people who work in Kāpiti Coast live. Table 1. Usual residence and place of work, Kāpiti Coast, 2013 Kāpiti Coast Palmerston North Workplace Horowhenua Porirua Lower Hutt Wellington City Kāpiti Coast 11,109 12 204 924 462 3,969 16,680 Total Palmerston North 0 Usual Residence Horowhenua 390 Porirua 123 Lower Hutt 0 Wellington City 15 Total 11,637 Source: (Statistics New Zealand, 2013) Of the 16,680 working residents living in Kāpiti Coast in 2013, 11,109 or two thirds, worked in Kāpiti. However, close to a quarter (24 percent) worked in Wellington City, and a further six percent worked in Porirua. This is in contrast to Kāpiti Coast s workforce, where most people who work on the Kāpiti Coast, live on the Kāpiti Coast. About three percent of Kāpiti Coast s workers lived in Horowhenua, and one percent lived in Porirua. The case for Kāpiti Coast as a desirable place to live is clear when you consider that 462 people who live on the Kāpiti Coast work in Lower Hutt. In contrast, no one who lives in Lower Hutt works on the Kāpiti Coast. This is replicated in the live-work relationship with Palmerston North. 4

Population, 000s Population An important factor impacting on the quantity of labour available for productive activity in an economy is the size and growth of the population and its age distribution. A stable or growing population is a good indicator of a sustainable and developing region. Change and projections Kāpiti Coast s population was estimated at 52,344 1 in 2017, making up about ten percent of the greater Wellington region population. Figure 3 compares Kāpiti Coast s population to other benchmark districts. Kāpiti Coast is the fourth largest district in terms of population behind Wellington City, Lower Hutt, and Porirua, albeit only slightly. Figure 3. Population of Kāpiti Coast and benchmark areas, 2016 250 200 150 100 50 0 Kapiti Coast Porirua Horowhenua Lower Hutt Wellington City Local authority area Source: (Statistics New Zealand, 2016) Over the 10 years to 2016, the Kāpiti Coast district s population grew by 0.9 percent per year (460 people per year), which is similar to the Wellington region, but below the rate of population growth of New Zealand as a whole (Table 2). 1 Estimated by.id 5

Table 2. Population change in benchmark areas and New Zealand, 2006 to 2016 Population 2006 2011 2013 2016 percent per annum 10yr 5yr 3yr Kapiti Coast 47,500 50,200 50,700 52,100 0.9% 0.7% 0.9% Porirua 50,600 53,000 53,700 55,400 0.9% 0.9% 1.0% Horow henua 30,600 31,000 31,200 31,900 0.4% 0.6% 0.7% Low er Hutt 101,300 101,700 101,200 103,400 0.2% 0.3% 0.7% Wellington City 187,700 195,400 197,500 207,900 1.0% 1.2% 1.7% Wellington Region 466,300 483,400 486,700 504,900 0.8% 0.9% 1.2% New Zealand 4,184,600 4,384,000 4,442,100 4,693,000 1.2% 1.4% 1.8% Source: Infometrics regional database 6

Population, 000s 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Population change, indexed Kāpiti Coast has been among the fastest growing districts in Wellington over 2001 2016, as shown in Figure 4. Kāpiti Coast s population has grown steadily over that period keeping pace with Wellington City and New Zealand. Figure 4. Annual population change, 2001 2016 Kapiti Coast District Porirua City Horowhenua District Lower Hutt Wellington City Wellington Region 125 New Zealand 120 115 110 105 100 95 90 Year Source: (Statistics New Zealand, 2016).id forecasts the Kāpiti Coast population will be 63,685 by 2043, a growth rate of 0.76 percent each year. This forecast has been used for KCDC s long term planning. Figure 5 also shows the Statistics NZ high and low growth projections (68,200 and 52,100 respectively) for comparison..id projections are based on fertility, mortality, migration and residential development assumptions. They do not take into account the impact infrastructure development (such as the Kāpiti expressway or Transmission Gully motorway) may have on population and business location decisions. Figure 5. Population projection to 2043, Kāpiti Coast district 80 70 60 50 40 30 20 High (Stats NZ) Medium (.id) 10 Low (Stats NZ) 0 2001 2006 2013 2018 2023 2028 2033 2038 2043 Year Source:.id (2013-base forecast) and (Statistics New Zealand, 2017) Growth rates over the last 10 years are closer to the high growth scenario. However, this has been in a period of high growth in the Wellington region and in New Zealand. Whether this continues if national and regional growth slows is to be seen. In the recent past, most population projections have underestimated actual population growth. Our view is that the.id projections are again likely to under-estimate the future population on the Kāpiti Coast. Driving this view is the strength of the regional and national economies, the migration of population from Wellington as a result the new transport links and lower house prices. 7

Age group Age group Age group Age profile The age profile of a population is an important factor to consider to understand future labour force potential. Kāpiti Coast has a comparatively older population 2, and a smaller proportion in the major working age group of 20 39 (Figure 6 and Figure 7). Figure 6. Age and sex profile, Kāpiti Coast, 2006 85 and over 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Male 2,000 1,500 1,000 500 0 500 1,000 1,500 2,000 Population Female Source: Statistics New Zealand, Census 2006 Figure 7. Age and sex profile, Kāpiti Coast, 2013 85 and over 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Male 2,000 1,500 1,000 500 0 500 1,000 1,500 2,000 Population Source: Statistics New Zealand, Census 2013 Female There are two significant differences in the agestructure of the Kāpiti Coast population compared with New Zealand (Figure 8). The first is the noticeable hollowing out of Kāpiti Coast s population between the ages of 15 39 (22 percent of Kāpiti Coast s population are in this age bracket compared with 33 percent of New Zealand s population). The second is the much greater proportion of people over the age of 65 in Kāpiti. A quarter of the Kāpiti Coast s population is over 65 compared with 14 percent nationally. Figure 8. Age and sex profile, New Zealand, 2013 Male Female 85 and over 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 200 150 100 50 0 50 100 150 200 Population, 000s Source: Statistics New Zealand, Census 2013 2 Which is set to continue to age like elsewhere in New Zealand. 8

Proportion of population Population, 000s The district s population projections by age group show a significant increase in the 65+ age group (35 percent of the Kāpiti Coast s population is projected to be over 65 in 2043), which will result in higher demand for health and social services. The projected share of population over 65 on the Kāpiti Coast in 2043 is much higher than the other districts in the Wellington region (ranging from 19 percent to 27 percent). From 2018 onwards, the number of people in the other age groups are projected to remain relatively unchanged although the proportion of the population made up by the 0 14 and 15 39 age groups will drop. Figure 9. 25 20 15 10 5 0 Population projections to 2043 by age group, Kāpiti Coast 0 14 15 39 40 64 65+ 1996 2001 2006 2013 2018 2023 2028 2033 2038 2043 Year Source: Statistics New Zealand, subnational population projections 1996-2043 (2013-base) medium projection Ethnicity Kāpiti had a relatively high proportion of people who identified themselves as European, representing 90 percent of the population relative to 74 percent nationally in Census 2013 (Figure 10). Figure 10. Ethnic population, Kāpiti Coast and New Zealand, 2013 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Kāpiti Coast New Zealand 0% European Maori Pacific Peoples Asian Other Source: Statistics New Zealand, Census 2013. Note: Other includes New Zealander. 9

Kāpiti had a slightly smaller proportion of people identify themselves as Māori compared with nationally, and a significantly lower proportion of people of Asian ethnicity, 3 percent compared to 11.8 percent nationally. The three main Iwi in the district include Ngāti Raukawa (15,135 people), Muaūpoko (2,691 people), and Te Atiawa ki Whakarongotai (723 members). 3 Note that not all members live in the Kāpiti Coast district. As well as being the major education provider in the district, Te Wānanga o Raukawa, based in Ōtaki, is one of the largest employers. 3 2013 census. 10

KĀPITI COAST ECONOMY This section looks at the economic measures of the Kāpiti Coast economy including GDP, earnings, employment, businesses, and location quotients. GDP Gross domestic product (GDP), or the total value added from goods and services produced in the region, is an important indicator of economic activity and arguably provides a good indicator of the standard of living in a locality. GDP estimates are real numbers, and have been adjusted for inflation to allow for trend comparison. 4 Table 3 presents GDP for Kāpiti Coast and benchmark districts in 2016, as well as the change in GDP over the last 3, 5, and 10 years. Table 3. GDP, benchmark areas and New Zealand, 2016 and 10, 5 and 3 year change Area GDP 2016 (2010$m) % pa grow th 10yr 5yr 3yr Kapiti Coast 1,550 1.8% 2.1% 3.6% Porirua 1,624 1.8% 1.3% 1.0% Horow henua 821 0.1% 1.9% 1.6% Low er Hutt 4,600-0.1% -0.4% -0.6% Wellington City 19,046 2.1% 2.0% 3.2% New Zealand 223,483 1.8% 2.5% 2.8% Source: Infometrics regional database In 2016, the Kāpiti Coast economy contributed $1.55 billion in GDP, similar to Porirua ($1.62 billion) and almost twice the contribution of Horowhenua ($821 million). Over the last 3 and 5 years, Kāpiti Coast s GDP has grown faster than all benchmark districts. Over the last 3 years, Kāpiti Coast s annual average growth of 3.6 percent was higher than for New Zealand (2.8 percent). 4 All GDP numbers are presented in 2010 dollars. 11

Area 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 GDP change, indexed 2001=100 Kāpiti Coast has experienced the strongest GDP growth amongst the benchmark regions and New Zealand over 2001 2016 as shown in (Figure 11). The Kāpiti Coast experienced very strong GDP growth over 2001 2008. GDP growth levelled off through to 2013, but has grown strongly again over the last 3 years. Since 2013, Kāpiti Coast s GDP has grown significantly faster than New Zealand s GDP. Figure 11. GDP change, 2001 2016 160 150 140 130 120 110 100 90 80 70 Kapiti Coast Porirua Horowhenua Lower Hutt Wellington City New Zealand Source: Infometrics regional database Year Kāpiti Coast s GDP grew at 1.8 percent per year over 2006 2016, which was the second highest of the benchmark districts behind Wellington City, which grew by 2.1 percent per year. Over this period Kāpiti Coast s GDP growth was similar to Porirua and New Zealand (Figure 12). Figure 12. GDP change, 2006 2016 Lower Hutt Horowhenua New Zealand Porirua Kapiti Coast Wellington City -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Source: Infometrics regional database % pa growth, 2006-2016 12

Area Area Over the last 5 years, the Kāpiti Coast district s annual average GDP growth has been stronger than all benchmark districts. However, it was slightly slower than the New Zealand average (2.1 percent compared to 2.5 percent annually) (Figure 13). Figure 13. GDP change, 2011 2016 Lower Hutt Porirua Horowhenua Wellington City Kapiti Coast New Zealand -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Source: Infometrics regional database % pa growth, 2011-2016 The last 3 years has seen a period of very strong GDP growth for the Kāpiti Coast (Figure 14). Over this period Kāpiti Coast s GDP grew by an average of 3.6 percent per year. This compares with 3.2 percent in Wellington City and 2.8 percent nationally. Figure 14. GDP change, 2013 2016 Lower Hutt Porirua Horowhenua New Zealand Wellington City Kapiti Coast -1% 0% 1% 2% 3% 4% Source: Infometrics regional database % pa growth, 2013-2016 13

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 GDP per capita, indexed 2001=100 Area GDP per capita GDP per capita shows the relationship between value added and population. It is an indication of the distribution of economic activity across the population. In 2016 Kāpiti Coast s GDP per capita was $29,740, well below national GDP per Capita of $47,620 (Figure 15). Kāpiti Coast s per capita GDP was similar to Porirua and slightly above that of Horowhenua. GDP per capita in the Kāpiti Coast district has followed a similar pattern to GDP over 2001 2016. Over the last 15 years, Kāpiti Coast s per capita GDP has grown the fastest of benchmark districts and New Zealand (Figure 16). GDP per capita growth was fastest in the early period (2001 2006). It then levelled off until 2013, when it accelerated at a faster rate than all benchmark districts. Figure 15. GDP per capita, 2016 Horowhenua Porirua Kapiti Coast Lower Hutt New Zealand Wellington City 0 20 40 60 80 100 Thousands GDP per capita, $2010 Source: Infometrics regional database and Statistics New Zealand subnational population estimates Figure 16. GDP per capita, 2001 2016 140 130 120 110 100 90 80 Kapiti Coast Porirua Horowhenua Lower Hutt Wellington City New Zealand Year Source: Infometrics regional database and Statistics New Zealand subnational population estimates 14

Area Area Per capita GDP in Kāpiti Coast grew by 0.9 percent each year over the last 10 years, much faster than the 0.6 percent growth each year across New Zealand (Figure 17). This was the second highest of the benchmark areas behind Wellington City (1.1 percent per year). Per Capita GDP growth on the Kāpiti Coast is in contrast to Lower Hutt and Horowhenua, where GDP per capita fell on average over the last ten years. Over 2011 2016, Kāpiti Coast had the strongest per capita GDP growth across benchmark areas of 1.4 percent per year on average (Figure 18). This compared with 1.1 percent growth nationally. Figure 17. GDP per capita change, 2006 2016 Lower Hutt Horowhenua New Zealand Porirua Kapiti Coast Wellington City -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% % pa growth, 2006-2016 Source: Infometrics regional database and Statistics New Zealand subnational population estimates Figure 18. GDP per capita change, 2011 2016 Lower Hutt Porirua Wellington City New Zealand Horowhenua Kapiti Coast -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% % pa growth, 2011-2016 Source: Infometrics regional database and Statistics New Zealand population estimates 15

Area Area Personal earnings Income and earnings are good measures of the standard of living because they capture what people receive from the value generated in an economy. Median income or earnings, in particular, are preferred measures because they show what the typical person or household receive and, unlike averages, are unaffected by extremes. Kāpiti Coast s annual median household income in 2013 was $53,300, below the New Zealand median of $63,800. The high national median is driven by higher incomes in the three major city-regions of Auckland, Wellington and Canterbury. Kāpiti Coast s median household income was below several comparator districts including Lower Hutt, Porirua and Wellington City, which each had higher median incomes than New Zealand as a whole (Figure 19). Positively, the Kāpiti Coast district s growth-rate for median annual household income over 2006 2013 was slightly above the New Zealand average (3.3 percent per year compared to 3.1 percent per year) (Figure 20). Of the comparator regions, Kāpiti Coast s growth rate was second only to Porirua over that time period. Figure 19. Median annual household income, 2013 Horowhenua Kapiti Coast New Zealand Lower Hutt Porirua Wellington City $0 $20 $40 $60 $80 $100 Thousands Median household income, nominal Source: Statistics New Zealand, Census 2013 Figure 20. Median annual household income change, 2006 2013 Horowhenua Lower Hutt Wellington City New Zealand Kapiti Coast Porirua 0% 1% 2% 3% 4% Source: Statistics New Zealand, Census 2013 % pa growth, 2006-2013 16

Area Area Area In 2013, annual median personal income (from all sources and including those 15 years old and above that are not in paid employment) in Kāpiti Coast was $26,900, which was below the Zealand median personal income level of $28,500 (Figure 21). Figure 21. Median annual personal income, 2013 Horowhenua Kapiti Coast New Zealand Porirua Lower Hutt Wellington City $0 $10 $20 $30 $40 Thousands Median annual personal income, nominal Source: Statistics New Zealand, Census 2013 Average earnings are affected more by extremes than the median measures. Over 2006 2013, the Kāpiti Coast district s median annual personal income growth rate was similar to the New Zealand average (2.3 percent per year compared to 2.2 percent per year) (Figure 22). Horowhenua and Porirua median annual personal incomes grew slightly faster than in Kāpiti Coast over 2006 2013. However, Kāpiti Coast s average annual personal earnings (i.e., the earnings of those employed or working proprietors) in 2016 was the lowest of the benchmark regions at $43,760. This compares with a national average of $57,780 and the Wellington City average of $72,600 (Figure 23). Figure 22. Median annual personal income change, 2006 2013 Lower Hutt Wellington City New Zealand Kapiti Coast Horowhenua Porirua 0% 1% 2% 3% % pa growth, 2006-2013 Source: Statistics New Zealand, Census 2013 Figure 23. Mean annual personal earnings, 2016 Kapiti Coast Horowhenua Porirua New Zealand Wellington Region Wellington City $0 $20 $40 $60 $80 Thousands Mean annual personal earnings, 2016 Source: Infometrics regional database 17

Area Area Mean annual personal earnings, 2010$ 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thousands Average annual earnings of people on the Kāpiti Coast have tracked those of Horowhenua very closely over 2000 2016 (Figure 24). The gap between average earnings in Kāpiti and those in the Wellington Region as a whole has grown over the past 16 years. Figure 24. Mean annual personal earnings, 2000 2016 Kapiti Coast New Zealand Porirua Horowhenua Wellington City Wellington Region $80 $70 $60 $50 In 2016, average earnings of people on the Kāpiti Coast were 68 percent of the average across the Wellington Region. $40 $30 $20 Year Source: Infometrics regional database Kāpiti Coast s annualised growth rate of mean personal earnings over 2006 2016 was just below the New Zealand average (3.1 percent per year compared to 3.4 percent per year) (Figure 25). By this measure, Kāpiti Coast s growth was the lowest of the comparator regions. However, the rate of growth for each of the benchmark areas over the last 10 years is relatively similar. Figure 25. Mean annual personal earnings change, 2006 2016 Kapiti Coast Porirua Horowhenua Wellington City Wellington Region New Zealand 0% 1% 2% 3% 4% % pa growth, 2006-2016 Source: Infometrics regional database Over the 2011 2016 period, the Kāpiti Coast district s growth in average earnings (2.4 percent each year) remained below the comparator regions (Figure 26). The gap in average earnings growth between Kāpiti Coast and New Zealand was more pronounced over the last 5 years than over the 10 year period. Figure 26. Median annual earnings change, 2011 2016 Kapiti Coast Porirua Wellington City Wellington Region New Zealand Horowhenua 0% 1% 2% 3% 4% % pa growth, 2011-2016 Source: Infometrics regional database 18

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Filled jobs Thousands Employment Changes in material standards of living can be attributed to increases in labour utilisation or labour productivity. Under-employment and unemployment will limit the overall performance of the region, and undermine the quality of life of its residents. We have used Infometrics data to consider how employment in the Kāpiti Coast has changed relative to trends across the benchmark areas and New Zealand. Table 4 presents employment (in terms of filled jobs) for Kāpiti Coast and benchmark areas in 2016, as well as the change in GDP over the last 3, 5, and 10 years. Table 4. Employment, benchmark areas and New Zealand, 2015 and 10, 5 and 3 yr change Area Filled Jobs (2016) %pa grow th 10yr 5yr 3yr Kapiti Coast 16,699 1.5% 1.4% 2.6% Porirua 18,188 1.3% 0.8% 1.0% Horow henua 10,326-0.4% 0.3% 1.6% Low er Hutt 47,763 0.0% -0.5% -0.1% Wellington City 159,120 1.2% 1.4% 1.6% New Zealand 2,367,355 1.2% 1.9% 2.4% Source: Infometrics regional database The number of filled jobs on the Kāpiti Coast was 16,700 in 2016. This is slightly less than the 18,190 jobs in the Porirua district. Employment growth on the Kāpiti Coast was the fastest of all benchmark districts and New Zealand over the last 10 and 3 year periods. Over the last 5 years, employment has grown faster than all benchmark districts apart from Wellington City (where employment growth was the same) but slower than New Zealand. The district experienced strong job growth over 2001 2008, before flattening after the global financial crisis. Job numbers have trended upward again over the past 3 years (Figure 27). Figure 27. Filled jobs on the Kāpiti Coast, 2001 2016 18 17 16 15 14 13 12 11 10 9 8 Source: Infometrics regional database Year 19

Area Area Area At 1.5 percent each year, employment growth in Kāpiti over the last 10 years was the strongest of all the benchmark districts and New Zealand (Figure 28). There was also strong growth in Porirua and Wellington City over this period. Employment in Lower Hutt was largely unchanged, whereas it declined in Horowhenua. Figure 28. Filled jobs change, 2006 2016 Horowhenua Lower Hutt New Zealand Wellington City Porirua Kapiti Coast -0.5% 0.0% 0.5% 1.0% 1.5% Source: Infometrics regional database % pa growth, 2006-2016 At 1.4 percent each year, there was reasonable growth in filled jobs on the Kāpiti Coast district over 2011 2016. Again, this was higher than the 1.2 percent per year growth in New Zealand as a whole (Figure 29). Over the past 5 years Kāpiti employment growth has almost matched that of Wellington City. Lower Hutt saw a decline in filled jobs over the past 5 years, whereas Horowhenua experienced slow growth. Kāpiti has had very strong job growth over 2013 2016 of 2.6 percent each year. This is double the national rate for the period of 1.3 percent each year (Figure 30). Over the last 3 years, Kāpiti Coast s job growth was significantly higher than Wellington City, which experienced growth of 1.6 percent each year. Horowhenua has also seen employment growth increase, whereas employment continued to decline each year in Lower Hutt. Figure 29. Filled jobs change, 2011 2016 Lower Hutt Horowhenua Porirua New Zealand Kapiti Coast Wellington City -0.5% 0.0% 0.5% 1.0% 1.5% % pa growth, 2011-2016 Source: Infometrics regional database Figure 30. Filled jobs change, 2013 2016 Lower Hutt Porirua New Zealand Horowhenua Wellington City Kapiti Coast -1.0% 0.0% 1.0% 2.0% 3.0% % pa growth, 2013-2016 Source: Infometrics regional database 20

Area Area Labour productivity Labour productivity measures how effectively labour is being used as a productive input in the economy. Improvements in productivity mean that a region is getting more value from its labour force and, as a consequence can compete globally and pay higher wages. GDP per employee provides a rough approximation of labour productivity (it is typically measured as the value of output per hour worked). Kāpiti Coast s labour productivity in 2016 was $92,796 per employee. This was just below the New Zealand average of $94,400. (Figure 31). While Kāpiti Coast s GDP per capita was significantly below that of Lower Hutt, on a per employee basis it is very similar. This is due to Kāpiti Coast s higher proportion of retirees and young people (i.e. a higher dependency ratio ) in its population. Figure 31. GDP per employee, 2016 Horowhenua Porirua Kapiti Coast New Zealand Lower Hutt Wellington City $0 $40 $80 $120 Thousands GDP per employee, 2016 Source: Infometrics regional database Kāpiti Coast s labour productivity growth performance over 2006 2016 has been half the New Zealand average (at 0.3 percent per year compared to 0.6 percent) (Figure 32). It is also lower than all other benchmark areas apart from Lower Hutt. In particular, Wellington City has seen significant improvement in labour productivity over the last 10 years. Figure 32. GDP per employee change, 2006 2016 Lower Hutt Kapiti Coast Porirua Horowhenua New Zealand Wellington City -0.5% 0.0% 0.5% 1.0% Source: Infometrics regional database % pa growth, 2006-2016 21

Area Kāpiti Coast s change in productivity growth over 2011 2016 was the second highest of the benchmark areas at 0.7 percent (Figure 33). Over this period, Kāpiti Coast s labour productivity growth was slightly above the national average. Horowhenua as seen a significant improvement in labour productivity over the last 5 years. Figure 33. GDP per employee change, 2011 2016 Lower Hutt Porirua Wellington City New Zealand Kapiti Coast Horowhenua 0.0% 0.5% 1.0% 1.5% 2.0% Source: Infometrics regional database % pa growth, 2011-2016 Part-time/Full-time According to the 2013 census, about 74 percent of employed in Kāpiti Coast were full-time workers. This was slightly less than nationally, where 77 percent of workers were employed full time. Between the ages of 45 and 64 there is little difference between part-time and full-time workers on the Kāpiti Coast compared to nationally. The Kāpiti Coast, however, has higher shares of part-time workers in the 15-44 age groups (27 percent compared to 23 percent nationally) and the over 65 age group (54 percent compared to 47 percent nationally). 22

Area 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Number of business units Businesses The number of businesses in a region provides another indicator of economic activity. A growing economy can expect to see an increase in the number of businesses as well as the size of businesses. Kāpiti Coast had close to 5,000 businesses in 2016 (4,941). Figure 34. Businesses on the Kāpiti Coast, 2001 2016 5,500 Figure 34 shows the change in the number of businesses on the Kāpiti Coast from 2001 to 2016. The number of businesses on the Kāpiti Coast increased rapidly between 2002 and 2007 before levelling out through to 2012. There was a short period of growth again between 2012 and 2014, before easing off through to 2016. 5,000 4,500 4,000 3,500 3,000 2,500 2,000 Year Source: Infometrics regional database Figure 35 compares the number of businesses on the Kāpiti Coast with benchmark districts. The Kāpiti Coast has slightly more businesses than Porirua. It has about half the number of businesses in Lower Hutt and twice the number of businesses in Horowhenua. Wellington City has significantly more businesses than all other benchmark districts. Figure 35. Businesses on the Kāpiti Coast and benchmark areas, 2016 Horowhenua Porirua Kapiti Coast Lower Hutt Wellington City Source: Infometrics regional database 0 5 10 15 20 25 30 Thousands Number of business units, 2016 23

Area Area Business growth (Figure 36) shows the growth in the number of businesses in each benchmark area over the 10 years to 2016. The growth of businesses on the Kāpiti Coast has been similar to Lower Hutt. Business unit growth has lagged Wellington City, Porirua and New Zealand. Horowhenua has seen a decline in business units between 2006 and 2016. (Figure 37) shows the growth in the number of businesses over the last 5 years to 2016. Figure 36. Business units change, 2006 2016 Horowhenua Lower Hutt Kapiti Coast Wellington City Porirua New Zealand -1.0% 0.0% 1.0% 2.0% % pa growth, 2006-2016 Source: Infometrics regional database Figure 37. Business units change, 2011 2016 Horowhenua Growth in the number of business units on the Kāpiti Coast over the last 5 years has slowed compared to the last 10 year period. Lower Hutt, Porirua and Wellington City have all seen faster growth in the number of business units than the Kāpiti Coast. Kapiti Coast New Zealand Porirua Lower Hutt Wellington City -0.5% 0.0% 0.5% 1.0% 1.5% % pa growth, 2011-2016 Source: Infometrics regional database Business size In terms of number of employees, the proportion of businesses in each size category on the Kāpiti Coast is very similar to the proportion of businesses across New Zealand as a whole (Table 5). In 2016, 1,050 businesses in Kāpiti had between 1 and 5 employees, representing 21 percent of all businesses, compared to 20 percent nationally. The number of medium-sized businesses in the district did not change significantly over 2006 2016. However, there has been a marked increase in the number of larger businesses. Compared to 10 years earlier, there were 15 more businesses employing 50-99 people (6.2 percent per year average 24

0 1-5 6-9 10-19 20-49 50-99 100+ % p.a. change in number of businesses, 2006-2016 increase) and 15 more businesses employing over 100 people (13.3 percent per year average increase) in 2016 (Figure 38). Table 5. Business size, Kāpiti Coast, 2006 and 2016 Employees 2006 2016 New Zealand, 2016 Business units % Business units % % 0 2,997 65.7% 3,360 68.0% 66.9% 1-5 1,089 23.9% 1,050 21.3% 20.4% 6-9 225 4.9% 237 4.8% 5.1% 10-19 156 3.4% 162 3.3% 4.1% 20-49 69 1.5% 78 1.6% 2.4% 50-99 18 0.4% 33 0.7% 0.7% 100+ 6 0.1% 21 0.4% 0.5% Total 4,560 100% 4,941 100% 100% Source: Infometrics regional database The change in the number of businesses by business size is shown below in Figure 38. Figure 38. Change in number of Kāpiti Coast businesses by business size, 2006 2016 16% 14% 13.3% 12% 10% 8% 6% 6.2% 4% 2% 0% -2% 1.1% -0.4% 0.5% 0.4% 1.2% Source: Infometrics regional database Number of employees Greatest growth over the last 10 years has been in the larger businesses. The number of businesses employing between 1 and 5 people has actually declined over the last 10 years. 25

Business demographics suggest that there are around 20 businesses that employ over 100 people and a further 33 that employ between 50 and 99 people. The number of larger businesses has also grown significantly in the last 10 years to the point where these businesses make up a similar proportion of total businesses as nationally. A better understanding of who the major businesses are on the Kāpiti Coast and ongoing engagement with them will provide useful inputs into the business development programme. Large/relevant employers on the Kāpiti Coast include: Recreational and personal services - Te Wānanga o Raukawa Grocery - Pak n Save Kāpiti, New World Kāpiti, New World Ōtaki, New World Waikanae, Countdown Ōtaki, Countdown Waikanae Retail - Mitre10 Mega, Paula s Furniture, Placemakers Kāpiti, Farmers Food processing - Tuatara Beers, Kāpiti Fine Foods, Fonterra Cheese Factory ICT/Creative Web Genius Public sector Kāpiti Coast District Council Construction/Developers Goodmans Contracting, Mills Albert, Concrete Doctors, Pritchards Construction, Coastlands, Kāpiti Landing, Electra Aged Care Metlifecare, Summerset retirement villages, Kāpiti Retirement Trust, Ryman Healthcare. Self-employment 5 A high proportion of the workforce on the Kāpiti Coast are self-employed relative to the national average. In 2016, 5,262 people, representing 31.5 percent of employed persons in Kāpiti, were selfemployed, compared to 18 percent nationally. This was a similar proportion to 15 years ago. In 4 of the last 5 years, the annual growth in self-employed people was higher than the rate of employment growth generally in Kāpiti, meaning the proportion of self-employed people has increased from 28.7 percent in 2011. The 31.5 percent of self-employed is much higher than the 18 percent self-employed nationally. 5 (Infometrics, 2017)The information in this section is high level findings from a report titled Self-employment in Kāpiti Coast District prepared by Infometrics in April 2017. 26

% of total Figure 39. Self employed as a share of total employment, 2016 120 self employed employees 100 80 60 69 82 40 20 0 32 Kāpiti Coast 18 New Zealand Source: Infometrics The largest number of self-employed people are in the construction industry (1,189), followed by professional, scientific and technical services (843) and administrative support services (518). Within the construction industry, house construction had the highest level of self-employment (315). The next two largest industries are knowledge intensive management advice and other consulting services (286), and computer system design and related services (232). In terms of occupation type, the largest number of self-employed people are managers (1,496), followed by professionals (1,171) and technicians and trades workers (765). Males are over-represented in the self-employment category, particularly in the older age groups 50+. Females however, are more likely to be self-employed than males in the 35 to 44 age group. 27

KĀPITI COAST SECTORS For the sector analysis, industries on the Kāpiti Coast have been grouped into 20 sectors. Note that these sectors have been determined based on their relevance to support the focus of the analysis. For example, aged care and accommodation have been separated out. The industries that make up each sector is provided in the appendices. The analysis looks at contribution and change in GDP and employment by sector. It also looks at location quotients (LQs), which gives an insight into comparative advantages based on the relative concentration of sector activity. Finally the analysis takes a closer look at sectors of interest in Kāpiti, namely construction, aged care and retail. 28

Table 6. Kāpiti Coast sector analysis Kapiti Coast Source: Infometrics Regional Database GDP Filled (2010$ m) GDP Jobs Rank 2016 2016 Empl Rank Labour productivity 2010$, 2016 Labour Productivity Rank Competitive strength GDP LQ Empl LQ 2006-2016, %pa change 2011-2016, %pa change 2016 2016 GDP Empl Lab prod GDP Empl Lab prod Primary Production incl. seafood 21.5 17 415 13 $51,725 16 0.3 0.4-1.4% -1.2% -0.2% 4.2% 0.8% 3.4% Forestry & w ood processing 17.4 18 125 20 $138,477 5 0.7 0.6-2.1% -3.3% 1.2% -1.3% -1.4% 0.1% Primary Processing 59.8 11 339 17 $176,266 3 1.2 0.6 7.0% 3.4% 3.5% 11.1% 5.3% 5.5% Manufacturing (incl. mining) 83.7 6 566 12 $147,795 4 0.8 0.7 0.4% -0.8% 1.3% 3.3% -0.1% 3.4% ICT 40.8 13 403 15 $101,392 8 0.8 1.0 3.9% 4.4% -0.5% -1.7% 1.5% -3.1% Arts & culture 81.4 7 638 10 $127,471 6 1.7 1.1 4.5% 1.1% 3.4% 6.7% 2.0% 4.6% Health 41.6 12 643 9 $64,669 14 0.7 0.6 4.3% 4.1% 0.1% 0.2% 0.0% 0.2% Aged Care 63.1 10 957 8 $65,867 13 3.4 2.9 5.0% 4.8% 0.2% 2.0% 1.7% 0.3% Business, finance & professional services 163.1 1 1,891 4 $86,264 11 0.8 0.8 1.2% 2.6% -1.3% 1.4% 4.7% -3.1% Construction & related services 154.7 2 2,782 1 $55,619 15 1.4 1.5 1.6% 1.6% 0.0% 2.8% 2.8% 0.0% Water, w aste, energy 38.6 14 91 21 $423,453 1 0.9 0.9 3.9% 1.5% 2.4% 10.3% -0.1% 10.4% Accommodation 4.9 20 160 18 $30,703 19 0.7 0.7 0.3% -0.4% 0.7% -0.4% -1.8% 1.5% Retail 94.3 5 2,076 3 $45,440 18 1.3 1.4 2.2% 0.0% 2.2% 2.9% -0.7% 3.6% Hospitality 35.3 15 1,152 7 $30,682 20 1.4 1.4 2.8% 2.1% 0.6% 3.4% 1.9% 1.4% Freight & logistics 68.6 9 620 11 $110,509 7 0.5 0.5 1.0% 0.0% 1.0% 0.9% 0.1% 0.8% Personal & recreational services 98.6 4 1,467 5 $67,244 12 1.8 1.4 3.1% 4.3% -1.2% 1.8% 2.5% -0.7% Property & real estate services 145.9 3 407 14 $358,247 2 1.6 1.4-1.4% -3.0% 1.7% -0.7% -1.4% 0.7% Public transport 13.2 19 134 19 $98,237 9 0.7 0.7 4.0% 2.8% 1.1% 0.1% -0.3% 0.4% Education 72.3 8 1,460 6 $49,519 17 1.1 1.1-0.6% 0.4% -1.0% -0.8% -0.2% -0.6% Government 34.4 16 370 16 $92,940 10 0.6 0.5 2.7% 2.2% 0.5% -2.4% -1.5% -0.9% Total 1,549.6 16,699 $92,796 1.8% 1.5% 0.3% 2.1% 1.4% 0.7% 29

INDUSTRY GDP Size GDP for the 20 sectors that make up the Kāpiti Coast economy is presented in Figure 40. Figure 40. GDP by sector, Kāpiti Coast, 2016 Business, finance & professional services Construction & related services Property & real estate services Personal & recreational services Retail Manufacturing (incl. mining) Arts & culture Education Freight & logistics Aged Care Primary Processing Health ICT Water, waste, energy Hospitality Government Primary Production incl. seafood Forestry & wood processing Public transport Accommodation 0 20 40 60 80 100 120 140 160 180 GDP, 2010$M Source: Infometrics Regional Database In terms of the largest sectors there is a strong services showing in the Kāpiti Coast economy. The first non-service or population-based sector is manufacturing, which is the sixth largest sector in terms of GDP. Figure 41 shows the share of the region s GDP in that sector compared to that sectors share of GDP nationally. 30

SECTOR Figure 41. GDP by sector share, Kāpiti Coast and New Zealand, 2016 Business, finance & professional services Construction & related services Property & real estate services Personal & recreational services Retail Manufacturing (incl. mining) Arts & culture Education Freight & logistics Aged Care Primary Processing Health ICT Water, waste, energy Hospitality Government Primary Production incl. seafood Forestry & wood processing Public transport Accommodation KC NZ 0% 5% 10% 15% 20% % OF TOTAL GDP Source: Infometrics Regional Database Compared to sector composition nationally, the Kāpiti Coast has a significantly higher share of sector activity in construction, property, personal & recreational services, retail, arts & culture and aged care. On the other side of the ledger, the Kāpiti Coast is underrepresented in sectors such as primary production, freight & logistics, government, health and manufacturing. The Kāpiti Coast district s largest sector - business, finance & professional services - accounts for a smaller proportion of GDP than the sector nationally. The relative size of activity in the district is considered further in a later section when we discuss location quotients (LQs). 31

Change Figure 43 shows the change in sector GDP in the Kāpiti Coast over the last 5 and 10 year periods. Figure 42. GDP change (5yr and 10yr) by sector, Kāpiti Coast Total Primary Processing Water, waste, energy Arts & culture Primary Production incl. seafood Hospitality Retail Manufacturing (incl. mining) Construction & related services Personal & recreational services Aged Care Business, finance & professional services Freight & logistics Health Public transport Accommodation Property & real estate services Education Forestry & wood processing ICT Government 5yr 10yr -4% -2% 0% 2% 4% 6% 8% 10% 12% PERCENT PER YEAR Source: Infometrics Regional Database Over the longer term (10-years), GDP growth has been fastest in primary processing, aged care, arts & culture, health, public transport, ICT and personal & recreational services sectors. More recently (last 5 years), GDP growth has been fastest in primary processing, waste water & energy, arts and culture, primary production, hospitality, retail, manufacturing and construction. There have been GDP declines over the last 5 years in government, ICT, forestry & wood processing, education, property & real estate services and accommodation. ICT GDP, which has increased significantly over the last 10 years, has declined over the last 5 years, which suggests that rapid growth occurred in the first 5 years in that sector. 32

INDUSTRY Employment When considering sectors by employment the picture is relatively similar in terms of change or growth. However, in terms of size, GDP vs people employed, there are differences. Figure 41 presents sectors on the Kāpiti Coast in order of number of employees. Size Figure 43 shows Kāpiti Coast sectors ranked by number of employees. Figure 43. Filled jobs by sector, Kāpiti Coast, 2016 Construction & related services Retail Business, finance & professional services Education Personal & recreational services Hospitality Aged Care Manufacturing (incl. mining) Health Arts & culture Freight & logistics Primary Production incl. seafood Property & real estate services ICT Government Primary Processing Accommodation Public transport Forestry & wood processing Water, waste, energy 0 500 1,000 1,500 2,000 2,500 3,000 FILLED JOBS Source: Infometrics Regional Database Construction, retail, education, personal & recreational services, hospitality and aged care all move up relative to GDP contribution, whereas property & real estate services, business, finance & professional services drop down. Capital intensive sectors, such as water, waste energy, have very few employees. 33

Change Figure 44 shows the change in employment in the key sectors on the Kāpiti Coast over the last 5-and 10-year periods. Figure 44. Filled jobs change (5yr and 10yr) by sector, Kāpiti Coast Total Primary Processing Business, finance & professional services Construction & related services Personal & recreational services Arts & culture Hospitality Aged Care ICT Primary Production incl. seafood Manufacturing (incl. mining) Health Water, waste, energy Education Public transport Retail Forestry & wood processing Property & real estate services Government Accommodation 5yr 10yr -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% PERCENT PER YEAR Source: Infometrics Regional Database Over the last 10 years, the fastest growth has been in personal & recreational services, aged care, ICT, health and primary processing sectors. Over the last 5 years, fastest growth has been in the primary processing, business, finance & professional services, construction, personal & recreational services sectors. There have been declines in the accommodation, property & real estate, forestry & wood processing, and retail sectors. The decline in retail employment, which is a significant and growing sector (in terms of GDP) in the district, is unexpected. 34

INDUSTRY Location Quotients LQs measure the concentration of industries in an area and can provide an indication of a region s comparative advantages. They measure industry employment (or GDP) within a specified location relative to industry employment (or GDP) nationally. An LQ greater than one means that the industry or segment is over-represented and concentrated relative to the rest of New Zealand, which suggests it is a net exporter and that some comparative advantages exist. Figure 45. GDP and employment location quotients by sector, Kāpiti Coast, 2016 Aged Care Property & real estate services Construction & related services Retail Arts & culture Hospitality Water, waste, energy Personal & recreational services Education Accommodation Forestry & wood processing Manufacturing (incl. mining) Business, finance & professional Primary Production incl. seafood ICT Health Public transport Primary Processing Government Freight & logistics Employment LQ GDP LQ 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 GDP LOCATION QUOTIENT Source: Infometrics Regional Database The Kāpiti Coast has six sectors with GDP LQs over 1.5 and four with employment LQs over 1.5 Sectors with high LQs include aged care, property & real estate services, construction & related services and retail. Personal & recreational services, and arts & culture also have high employment LQs. 35

Key Sectors In this section we take a more detailed look at some of the sectors that have a strong influence on the Kāpiti Coast economy. Construction The construction sector contributes about $155 million to the Kāpiti Coast economy, about 10 percent of the district s total GDP. However, the 2,780 filled jobs the sector supports equates to about 16.7 percent of the district s total employment. GDP in the construction sector has grown at 1.3 percent each year over the last 10 years. However, growth has been more than double that over the last 5 years, where it has grown by 2.8 percent each year. The sector is relatively concentrated in the district with a GDP LQ of 1.4 and an employment LQ of 1.5. Table 7 shows the size, growth and LQs in the construction sector compared to benchmark districts and nationally. Table 7. GDP and filled jobs in the construction sector - size, growth and LQ by benchmark area Construction & related services Source: Infometrics Regional Database GDP, 2010$m Filled Jobs GDP Filled Jobs GDP Filled Jobs 2016 2006 to 2016, %pa 2011 to 2016, %pa GDP Filled Jobs Horow henua 59.6 1,095 2.3% 2.0% 1.8% 1.7% 1.0 1.0 Porirua 168.5 2,691 5.4% 4.6% 3.7% 3.0% 1.4 1.4 Low er Hutt 384.7 6,349 0.4% 1.0% -0.2% 0.3% 1.1 1.2 Kapiti Coast 154.7 2,782 1.6% 1.6% 2.8% 2.8% 1.4 1.5 Wellington City 633.8 9,644 1.3% 0.9% 1.1% 0.9% 0.5 0.6 New Zealand 16,508.4 256,693 2.5% 2.4% 4.4% 4.7% Location Quotient Compared to nationally and against benchmark districts, the construction sector is relatively important to the Kāpiti Coast. The district s LQs are similar to Porirua and well above the other benchmark districts. However, GDP and filled jobs in the sector have grown slower than nationally and in Porirua over both the 10 and 5 year periods. Construction sector growth has also been slower than in Horowhenua over the last 10 years. 36

House Construction Site Preparation Services Electrical Services Painting and Decorating Services Plumbing Services Plastering and Ceiling Services Roofing Services Road and Bridge Construction Engineering Design and Engineering Tiling and Carpeting Services Concreting Services Landscape Construction Services Other Construction Services n.e.c. Other Heavy and Civil Engineering Non-Residential Building Construction Architectural Services Carpentry Services Architectural Aluminium Product Bricklaying Services Glazing Services Surveying and Mapping Services Other Residential Building Construction Air Conditioning and Heating Services Other Building Installation Services Fire and Security Alarm Installation Services Land Development and Subdivision GDP, 2010$M FILLED JOBS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Index (filled jobs) Indexed growth in filled jobs against benchmark regions and New Zealand is shown in Figure 46. Kāpiti Coast s job growth in the construction sector has been similar to the national average. Growth was strong from 2001 through to 2008 before declining through to 2013. Porirua has seen the fastest growth in construction sector employment between 2001 and 2016. However, that growth has eased off and, in the last 3 years, growth has been fastest on the Kāpiti Coast. Figure 46. Change in filled jobs in the construction sector, benchmark area, 2001 2016 240 220 200 180 160 140 120 100 Kapiti Coast Horowhenua Porirua Lower Hutt Wellington City New Zealand Source: Infometrics Regional Database Year The construction sector is made up of a number of industries. Figure 47 presents the employment and GDP in each of the industries that make up the sector. Figure 47. GDP and filled jobs by industry in the construction sector, Kāpiti Coast, 2016 25 GDP Employment 600 20 500 15 10 5 400 300 200 100 0 0 CONSTRUCTION & RELATED SERVICES Source: Infometrics Regional Database 37

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Index (filled jobs) House construction is the largest industry in the construction sector, accounting for 13 percent of GDP and 18 percent of employment. Other industries associated with house construction are also relatively significant in the district. However, road and bridge construction, engineering design and engineering consulting services, and other heavy and civil engineering construction are also relatively prominent. These industries likely reflect the large transport projects that have been underway. Looking at LQs, many industries in the sector are relatively highly concentrated in the district. Industries with employment LQs greater than 2 include roofing services (4.1), site preparation services (3.5), tiling and carpeting services (3.2), plastering and ceiling services (3.1), concreting services (2.8), glazing services (2.4), carpentry services (2.3), painting and decorating services (2.1), and surveying and mapping services (2.0). The impact of transport infrastructure over the last 5 years has been significant. The greatest growth in GDP and employment over the last 5 years has been in structural steel erection services (24.4 percent and 26.5 percent each year), road and bridge construction (20.5 percent and 21.5 percent each year), surveying and mapping services (17.1 percent and 17.2 percent each year), other heavy and civil engineering construction (15.1 percent and 15.6 percent each year) and other construction services nec (11.7 percent and 12.4 percent each year). Aged Care The aged care sector contributes $63.1 million to the Kāpiti Coast district s economy and accounts for 957 filled jobs. This is around 4.1 percent of the district s GDP and around 5.7 percent of the district s employment. Over the last 16 years, the fastest employment growth in the aged care sector has been in Lower Hutt. However, since 2006, growth has been fastest in Kāpiti Coast, to the point where it has almost caught up to Lower Hutt. There has been a recent acceleration in growth in Wellington City since 2011. Figure 48. Change in filled jobs in the aged care sector, benchmark area, 2001 2016 210 190 170 150 130 110 90 70 Kapiti Coast Horowhenua Porirua Lower Hutt Wellington City New Zealand Source: Infometrics Regional Database Year 38

GDP, 2010$M FILLED JOBS Table 8 shows the size, growth and LQs in the aged care sector compared to benchmark districts and nationally. Table 8. GDP and filled jobs in the aged care sector - size, growth and LQ by benchmark area GDP, 2010$m Filled Jobs GDP Filled Jobs GDP Filled Jobs Location Quotient Aged Care 2016 2006 to 2016, %pa 2011 to 2016, %pa GDP Filled Jobs Horow henua 26.1 529 0.2% 0.0% 1.4% 1.2% 2.5 2.5 Porirua 19.3 293 1.3% 1.1% -11.1% -11.4% 1.0 0.8 Low er Hutt 75.4 1,147 2.8% 2.6% -0.9% -1.1% 1.3 1.2 Kapiti Coast 63.1 957 5.0% 4.8% 2.0% 1.7% 3.3 2.8 Wellington City 113.6 1,725 1.6% 1.4% 6.7% 6.5% 0.5 0.5 New Zealand 2,737.3 46,367 2.6% 1.9% 2.4% 1.3% Source: Infometrics Regional Database The aged care sector in Kāpiti Coast has seen the fastest growth in both employment and GDP over the last 10 years. However, over the last 5 years, growth has been fastest in Wellington City. Kāpiti Coast has the highest LQ s at 3.3 and 2.8 for GDP and employment respectively. Horowhenua also has relatively high LQs at 2.5 for both GDP and employment. The aged sector is made up of two industries aged care residential services, and other residential care services. Figure 49 presents the employment and GDP of both industries. Figure 49. GDP and filled jobs by industry in the aged care sector, Kāpiti Coast, 2016 60 GDP Employment 800 50 700 600 40 500 30 400 20 300 200 10 100 0 Aged Care Residential Services Other Residential Care Services 0 AGED CARE Source: Infometrics Regional Database 39

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Index (filled jobs) Aged care residential services accounts for close to 80 percent of GDP and employment and has the higher LQs at 3.8 and 3.3 respectively. The industry has also been responsible for all of the growth over the last 5 years, with GDP growing by 5.9 percent and employment by 5.7 percent each year. The other residential care services industry has seen an annual decline over the last 5 years in GDP (7.5 percent) and employment (-7.7 percent). According to the Ministry of Health there are 13 aged-care facilities on the Kāpiti Coast, providing a total of 805 beds. A report by JLL 6 shows that most supply and demand is in the golden triangle incorporating the cities of Auckland, Hamilton and Tauranga and the 75+ penetration rates in these areas are high (15.1 percent and 17.4 percent in Auckland and Bay of Plenty respectively). The penetration rate in the Wellington region is at 14.3 percent, which is above the national penetration rate of 12.4 percent. The JLL report also looks at industry trends and suggest a decline in interest in aged care facilities within retirement villages due in part to the current funding model. They are also seeing an increase in the average age of residents, driven by higher age of entry requirements and better health of the aged population. Retail The retail sector contributes $94.3 million to the Kāpiti Coast GDP and employs 2,076 people. The sector accounts for 6.1 percent of the district s GDP but 12.4 percent of its employment. Figure 50. Change in filled jobs in the retail sector, benchmark area, 2001 2016 140 130 Kapiti Coast Horowhenua Porirua Lower Hutt Wellington City New Zealand Nationally, employment in the retail sector grew strongly between 2001 and 2008 before easing off through 2013 before recovering. Kāpiti Coast generally followed the national trend, albeit at a slightly slower rate and with a slight lag. However, the retail sector on the Kāpiti Coast hasn t recovered since 2008 and has actually seen a further decline in employment over the last couple of years. 120 110 100 90 80 Source: Infometrics Regional Database Table 9 shows the size, growth and LQs in the retail sector compared to benchmark districts and nationally. Year 6 (JLL, 2017) 40

Table 9. GDP and filled jobs in the retail sector - size, growth and LQ by benchmark areas GDP, 2010$m Filled Jobs GDP Filled Jobs GDP Filled Jobs Location Quotient Retail 2016 2006 to 2016, %pa 2011 to 2016, %pa GDP Filled Jobs Horow henua 52.8 1,112 1.2% -0.9% 2.0% -1.4% 1.4 1.2 Porirua 97.6 2,139 1.4% -0.8% 2.2% -1.4% 1.3 1.3 Low er Hutt 215.9 4,698 2.3% 0.0% 3.1% -0.5% 1.1 1.1 Kapiti Coast 94.3 2,076 2.2% 0.0% 2.9% -0.7% 1.4 1.4 Wellington City 408.6 9,020 1.3% -0.9% 2.8% -0.7% 0.5 0.6 New Zealand 9,788.8 206,572 2.2% 0.3% 3.6% 0.6% Source: Infometrics Regional Database The retail sector has seen solid GDP growth but employment has grown much slower. This is likely a result of technology changes and shopping behaviour. Over the last 10 years, Kāpiti Coast GDP in the retail sector has increased at the same rate as nationally. However, employment has not changed, compared to 0.3 percent per year growth nationally. However, there has been zero to negative growth in employment in all the other benchmark areas. Over the last 5 years, Kāpiti Coast GDP is the second fastest of the benchmark areas behind Lower Hutt. However, all benchmark areas lag behind national GDP growth. There is a similar performance in filled jobs over the last 5 years. Kāpiti Coast has the highest LQs of the benchmark areas, with GDP and employment LQs of 1.4. The retail sector is made up of a number of retail types (or industries). Figure 51 presents the employment and GDP in each of the industries that make up the sector. 41

Supermarket and Grocery Stores Hardware and Building Supplies Retailing Department Stores Clothing Retailing Other Store-Based Retailing n.e.c. Pharmaceutical, Cosmetic and Toiletry Fuel Retailing Car Retailing Electrical, Electronic and Gas Appliance Footwear Retailing Other Specialised Food Retailing Sport and Camping Equipment Retailing Furniture Retailing Tyre Retailing Floor Coverings Retailing Liquor Retailing Antique and Used Goods Retailing Fresh Meat, Fish and Poultry Retailing Motor Vehicle Parts Retailing Fruit and Vegetable Retailing Garden Supplies Retailing Watch and Jewellery Retailing Manchester and Other Textile Goods Non Store Retailing Flower Retailing Houseware Retailing GDP, 2010$M FILLED JOBS Figure 51. GDP and filled jobs by industry in the retail sector, Kāpiti Coast, 2016 30 GDP Employment 700 25 20 15 10 5 600 500 400 300 200 100 0 0 RETAIL Source: Infometrics Regional Database Supermarket and grocery stores make up the largest proportion of activity in the sector, accounting for about 30 percent of GDP and employment. This is followed by hardware and building supplies retailing, department stores, then clothing retailing. There is only one industry, footwear retailing (2.1), with an employment LQ greater than 2. However, there are a number of industries with employment LQs greater than 1.5 including antique and used goods retailing (1.8), hardware and building supplies retailing (1.8), supermarket and grocery stores (1.6), department stores (1.6), other specialised food retailing (1.6), and floor coverings retailing (1.6). In terms of growth over the last 5 years, the fastest GDP and employment growth has been in houseware retailing (39.3 percent and 34.2 percent), tyre retailing (16.6 percent and 12.4 percent), and flower retailing (11.7 percent and 7.7 percent). There has been a large GDP and employment decline over the last five years in fresh meat, fish and poultry retailing (-6.7 percent and 10.2 percent), and in fuel retailing (-4.3 percent and -7.9 percent). 42

KĀPITI COAST INFRASTRUCTURE Impact of road transport changes In order to inform KCDC s policy for attracting and retaining businesses, it is important to understand the impact of the recently completed expressway and opportunities arising from it, as well as the potential impacts of the corridor once the Transmission Gully and Ōtaki bypass sections are completed. The Kāpiti expressway is an 18 kilometre, state-of-the-art, four-lane highway between Raumati South and Peka Peka which opened in February 2017 (Figure 52). It allows traffic on SH1 to flow uninhibited through Paraparaumu and bypasses the Waikanae township. It also reduces congestion on the former SH1, allowing local residents a faster trip between Paraparaumu and Waikanae town centres. Figure 52. Kāpiti expressway Source: New Zealand Transport Agency. The expressway will form the central section of three projects. The $850 million Transmission Gully highway to the south and the $330 million section from Peka Peka to north of Ōtaki are both expected to open in 2020. When complete, there will be a continuous four-lane corridor from Wellington to north of Ōtaki. A further project also being considered is from Ōtaki to Levin. These projects are shown in Figure 53. 43

Figure 53. Four roading projects Source: New Zealand Transport Agency. The NZTA assessment of economic effects 7 suggested a net increase in economic wellbeing. There would be increased economic activity during the construction, positive impacts for local residents and businesses from reduced vehicle operating costs, travel times, accident costs and trip reliability, increased economic activity once the expressway is operational. The report noted that there would be some redistribution of activity as businesses and residents take advantage of the changes in the roading network, while others experience disruption of the current dynamics of passing traffic. 7 (Beca, Boffa Miskell and Incite, 2012) 44

The range of expressway impacts include: reduced demand for businesses located adjacent to the former SH1 growth in retail businesses in close proximity to the expressway on/off-ramps in Paraparaumu and Waikanae Beach. shorter commute time to Wellington increase in visitors from Wellington to the Coast for the day or weekend increase in demand for housing as people view Kāpiti as a more attractive place to live reduced freight costs potential to improve amenity, safety and pedestrian environments of Paraparaumu and Waikanae town centres adjacent to the former SH1. An earlier report 8 suggests that in other areas where SH1 traffic has been diverted from existing town centres, the impact on retailers has been in the order of 20 to 25 percent and that a similar impact could be expected for Kāpiti centres. Initial feedback is that there has been a drop-off in businesses that were along the original state highway. However, at the same time other businesses in the vicinity of the expressway on- and offramps have seen a marked increase in activity. More generally, there appears to be increased interest in commercial activity in the district due to the improved links to Wellington. Good examples of where traffic has been diverted around main centres include Taupō and Cambridge to the north. In both cases, an initial drop in business was experienced. However, business has since returned. In the case of Cambridge, there was a proactive strategy to inform traffic of amenities and services in Cambridge, such as through NZTA signage. We expect that KCDC would need to take a proactive approach to informing travellers of the amenities and activities available as they are passing through. Telecommunications The Kāpiti Coast is very well connected with fibre in Paraparaumu, Waikanae town centre and Paekakariki. Fibre is planned to be installed in Ōtaki as well as extended in Waikanae and Paraparaumu. VDSL, ADSL and wireless is available across most of the populated areas on the Kāpiti Coast. Cable is available in Paraparaumu and Paekakariki. Fibre and VDSL are necessary to support knowledge based industries who tend to be exporters of weightless products. 8 (Property Economics Limited, 2011) 45

Fibre VDSL ADSL Cable Source: UFB.org.nz/maps Accessed 15 September 2017 46