Construction was the key driver of a 2.6 per cent increase in Auckland's economic activity in the year to March, figures from Auckland Council show.
Building consents for the three months to May were 28.7 per cent higher than in the same quarter in 2013, according to the latest Auckland Economic Quarterly published today.
Auckland Council chief economist Geoff Cooper said consent volumes had continued to climb through the first five months of this year, and looked set to maintain their growth over the second half of the year.
Auckland's hotels and retailers had benefited from a strong lift in domestic tourism as well as a modest increase in the number of well-heeled visitors from the United States and Europe, Cooper said.
Domestic guest nights in Auckland's hotels in the three months to April were 6.2 per cent higher than in the same three months in 2013, while international guest nights were 2.9 per cent higher.
This helped to push up Auckland retail spending in the March quarter by 6.7 per cent in dollar terms compared with the same quarter of 2013, a 5.1 per cent year-on-year growth when adjusted for inflation.
But the unemployment rate in Auckland remained high, particularly among youth.
But overall unemployment in Auckland in the March quarter was the same as a year earlier at 7.3 per cent, which compares with a figure of 5.7 per cent for the rest of New Zealand.
But Cooper said the unemployment figures reflected strong growth in both employment and the supply of labour, each up 4.3 per cent over the March quarter of 2013.
"A further pickup in net migration levels in the March quarter boosted labour supply, particularly among men aged 20 to 39, and the labour force participation rate rose to 69.4 per cent, its highest level since the December quarter of 2008," Cooper said.
"The impetus to demand, and to labour supply growth, from net migration looks set to weaken from here, but net migration levels are expected to remain elevated given the current labour market weakness in Australia," he said.
Unemployment in Auckland among the 20 to 24 age group was 15.7 per cent in the March quarter and 27.7 per cent for those aged between 15 and 19.
"Youth unemployment figures have been bouncing around quite a bit but it's clear that the less experienced people in the work force are having trouble finding work," Cooper said.
Is there enough support for new migrants once they arrive in New Zealand?