Labour Market Steadily Improving Despite Earthquake Disruption

Latest figures reinforce the trend of gradual improvement in the labour market, according to analysis by the Labour and Immigration Research Centre, a service of the Department of Labour.

The Research Centre’s quarterly analyses, the Labour Market Scorecard, Employment and Unemployment Report and Regional Labour Market Reports are now available on the Department’s website www.dol.govt.nz/publications/lmr/index.asp.

The Household Labour Force Survey results released by Statistics New Zealand on 4 August showed that the unemployment rate remained unchanged at 6.5% in the June 2011 quarter after being revised down from 6.6% in the March quarter.

Participation, whilst remaining high, fell slightly by 0.2 percentage points to 68.4%. Employment growth remains flat with some 1000 additional people employed.

“Given the volatility in the labour market over the recession, and the impact of the earthquake, this quarter’s results show a steadily improving labour market,” says Dr Dafydd Davies, Manager Labour Market Information and Analysis.

“This continues the underlying trend of a gradually improving labour market, with unemployment expected to fall from the current 6.5% to below 6 % by mid-2012.”

Employment is 2.0 percent higher than a year ago, and labour force participation has increased over the same period. Much of the employment increase during the year was for people who are self-employed without any employees. The unemployment rate remains below its December 2009 quarter peak.

While the results for Canterbury went against the national trend, with the unemployment rate rising by 0.9 percentage points over the year, at 5.7% the Canterbury unemployment rate is still below the national average.

Rising wage growth, increased employment intentions, and continued growth in online job advertisements point to a gradual strengthening in the demand for labour over the past year.

“As the disruptions from the earthquakes diminish, economic growth is expected to increase further over the second half of 2011 as a result of robust trading partner growth, high commodity prices, low interest rates, the Rugby World Cup and the early stages of earthquake reconstruction,” says Dr Davies.