New Zealand Rock Star Economy

The Ministry of Business, Innovation and Employment in New Zealand has recently released the Labour Market Scorecard – May 2015. Below is a summary of the key points (Click here to read the full article).

Current state of the labour market: Strong

  • The overall state of the labour market remains robust. Indicators of economic activity are at historically elevated levels, and this is reflected in increased labour demand. Both net migration and labour force participation are at record levels, leading to an expanding labour supply. The unemployment rate remained unchanged over the quarter.

Labour demand: Strong and is steady over the quarter

  • Employment increased by 16,000 (0.7 per cent) between the December and March quarters, and is up 74,000 (3.2 per cent) over the year ending March.
  • Over the year, the biggest industry contributors to employment growth were construction (up 23,300, or 12.3 per cent), arts, recreation and other services (up 17,700, or 12.6 per cent), manufacturing (up 15,900, or 6.6 per cent), and retail trade and accommodation (up 13,900, or 3.9 per cent).

Labour market matching: Strong and is steady over the quarter

  • The unemployment rate remained unchanged over the quarter, at 5.8 per cent, despite the strong employment growth. This is a reflection of the rising participation rate, as more people move into the labour force looking for work.

Labour supply: Strong and has improved over the quarter

  • In the year ending March, New Zealand had a net gain of 56,300 permanent and long-term migrants, the highest level of annual net migration on record.
  • In line with increased population, 73,000 people joined the labour force over the year to March. This lifted the labour force participation rate to 69.6 per cent, the highest since the data series began in 1986.
  • Migration, particular of younger age-groups, is strongly influencing labour supply growth. Half the annual growth in the labour force came from those in the 20-34 year age group. This age group also accounted for over two-thirds of the increase in permanent and long-term arrivals between 2014 and 2015 March years.

Labour quality: Strong and has improved over the year

  • New Zealand’s tertiary indicators are high by international standards and there is strong performance coming through in school leaver achievement.
  • The share the workforce with a bachelor’s degree or higher was 25.2 per cent in the December 2014 quarter, an increase from a year ago.

Workplace performance dial: Neutral but has improved over the year

  • Measures of wage growth remained subdued over the December quarter, but this comes against a backdrop of low inflation.

In summary, net immigration for New Zealand is the highest on record – things are looking very good in New Zealand. If you’re interested in finding out more about living and working in New Zealand, attend one of our This is New Zealand Seminars in June (LondonBirminghamManchester and Glasgow) to find out more click here.