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Jobs Online monthly report – August 2011

Jobs Online measures changes in job vacancies advertised on the main internet job boards - SEEK and Trade Me Jobs. It provides a timely indicator of labour market demand, which can tell us about employment prospects in the short term.

Every four months the Jobs Online report will be longer and will include more in-depth analysis of job vacancy trends. This is the first report of that kind and the main focus of this report is on job vacancy trends in Canterbury. This report introduces some improvements to occupational coding that may result in slight changes to the figures presented in this report.

Key points

Job vacancy trends in New Zealand

Online job vacancies increased in August

The latest results from Jobs Online show that the number of job vacancies advertised online increased in August 2011. Jobs Online shows, in seasonally adjusted terms, that skilled[1] vacancies grew by 3.9% in August 2011. All vacancies rose by 6.3% following a decrease in July 2011.

Figure 1: Skilled Vacancies Index (SVI), seasonally adjusted and trend series (May 2007=100)

Figure 1: Skilled Vacancies Index (SVI), seasonally adjusted and trend series (May 2007=100).

Data table for Figure 1

 

Figure 2: All Vacancies Index (AVI), seasonally adjusted and trend series (May 2007=100)

Figure 2: All Vacancies Index (AVI), seasonally adjusted and trend series (May 2007=100).

Data table for Figure 2

 

Over the past year, skilled vacancies increased by 21.3% and all vacancies increased by 21.7%. Job advertisements have been increasing consistently since August 2009, when they were at their lowest point due to the recession, with skilled vacancies up by 66.8% and all vacancies up by 68.8%.

Growth in skilled job vacancies varied by industry

Table 1 shows that growth in the number of advertised skilled job vacancies increased in most industry groups. Industries that had the largest growth in August were sales, retail, marketing and advertising (up by 10.6%), accounting, HR, legal and administration (up by 6.4%), and healthcare and medical (up by 5.0%).

Industries that showed a decrease in skilled job vacancies were hospitality and tourism (down by 3.9%), and IT (down by 2.9%). The drop in skilled vacancies in the hospitality and tourism industry was due to the big drop in vacancies in the Canterbury region (see Section 2 for further details).

Over the past year, growth in skilled job vacancies was the strongest in the construction and engineering industry (up by 35.2%), due to the reconstruction activities in Canterbury and preparations for the Rugby World Cup. There was also significant growth in the hospitality and tourism industry (up by 25.0%), mainly due to the demand for workers in this industry for the Rugby World Cup, despite a drop in August.

Table 1: Skilled Vacancies Index (SVI) by industry group, seasonally adjusted

Industry Monthly change
(Jul 11 - Aug 11)
Annual change
(Aug 10 – Aug 11)
Sales, retail, marketing & advertising 10.6% 19.6%
Accounting, HR, legal and admin 6.4% 27.6%
Healthcare and medical 5.0% 7.6%
Education and training 3.8% 3.2%
Construction and engineering 0.4% 35.2%
IT -2.9% 11.1%
Hospitality and tourism -3.9% 25.0%
Other 2.2% 31.4%
Total skilled vacancies 3.9% 21.3%

Figure 3 and Figure 4 shows the long-term trends for industry groups. Growth in job vacancies in the construction and engineering industry was at its peak prior to the recession and fell strongly compared with other industry groups during the downturn. However, the education and training industry was very resilient during the downturn.

Figure 3: Skilled Vacancies Index (SVI) by industry group, seasonally adjusted series (May 2007=100)

Figure 3: Skilled Vacancies Index (SVI) by industry group, seasonally adjusted series (May 2007=100).

Data table for Figure 3

 

Figure 4: Skilled Vacancies Index (SVI) by industry group, trend series (May 2007=100)

Figure 4: Skilled Vacancies Index (SVI) by industry group, trend series (May 2007=100).

Data table for Figure 4

 

Skilled job vacancies grew in all major occupation groups

The number of skilled job vacancies increased across all the major skilled occupation groups in August. The managers occupation group had the strongest growth in August (up by 7.7%), followed by professionals (up by 1.4%).

Table 2: Skilled Vacancies Index (SVI) by highest skilled occupation group, seasonally adjusted

Occupation Monthly change
(Jul 11 - Aug 11)
Annual change
(Aug 10 – Aug 11)
Managers 7.7% 46.0%
Professionals 1.4% 12.0%
Technicians and trades 0.9% 38.6%
Total skilled vacancies 3.9% 21.3%

Skilled job vacancies increased in most regions

The number of skilled job vacancies rose in most regions in August. Table 3 shows that growth was the strongest in the South Island excluding Canterbury (up by 8.7%), and in Canterbury (up by 5.5%). The North Island, excluding Auckland and Wellington, was the only region that had a decrease in job vacancies in August (down by 0.5%).

On an annual basis, skilled job vacancies increased in all regions, with Canterbury experiencing the strongest growth of any region (up by 57.1%). The strong growth in Canterbury is to be expected given the reconstruction and demolition work in the region following the recent earthquakes.

Table 3: Skilled Vacancies Index (SVI) by region, seasonally adjusted

Region Monthly change
(Jul 11 - Aug 11)
Annual change
(Aug 10 – Aug 11)
Auckland 3.9% 18.0%
Wellington 1.8% 12.4%
North Island - Other -0.5% 20.9%
Canterbury 5.5% 57.1%
South Island - Other 8.7% 19.2%
Nationwide 3.9% 21.3%

Figure 5 and Figure 6 show the long-term trends for Jobs Online by region. Job vacancies in Wellington and Auckland were hit hardest by the recession and are recovering more slowly than in the other regions.

Figure 6: Skilled Vacancies Index (SVI) by region, trend series (May 2007=100)

Figure 6: Skilled Vacancies Index (SVI) by region, trend series (May 2007=100).

Data table for Figure 6

 

Job vacancy trends in Canterbury

This section provides a more in-depth look at what is driving the growth in skilled job vacancies in Canterbury, especially since the September 2010 and February 2011 earthquakes that hit the region.

Demand for labour in construction and engineering slowed down

Table 4 shows the growth in skilled job vacancies by industry group in the Canterbury region over different time periods: monthly, annually and the change since January 2011 to show the effects of the earthquakes.

In August 2011, the number of skilled job vacancies in Canterbury increased across most industry groups. Industries in the region that experienced the strongest growth were healthcare and medical (up by 22.4%), sales, retail, marketing and advertising (up by 8.8%), and accounting, HR, legal and administration (up by 8.2%).

There was a decrease in the number of skilled job vacancies in the construction and engineering industry (down by 2.1%), showing a lull in hiring in this industry in the past month. However, over the past year, the strong growth in skilled job vacancies in the region was driven by high growth in the construction and engineering industry (up by 149.3%). This is expected given the reconstruction activity needed following the recent earthquakes in the region. Between January 2011 and August 2011, job vacancies in this industry grew by 69.5%.

The number of skilled job vacancies fell in hospitality and tourism. These job vacancies were down by 32.2% in August and 24.7% over the year.

Table 4: Skilled Vacancies Index (SVI) for Canterbury by industry group, seasonally adjusted

Industry Monthly change
(Jul 11-Aug 11)
Annual change
(Aug 10 – Aug 11)
Change since January
(Jan 11- Aug 11)
Healthcare & medical 22.4% 45.4% 97.2%
Sales, retail, marketing & advertising 8.8% 30.9% 6.9%
Accounting, HR, legal and admin 8.2% 73.4% 54.4%
Education & training 5.1% -5.4% 20.3%
IT -0.5% 18.7% 20.6%
Construction & engineering -2.1% 149.3% 69.5%
Hospitality & tourism -32.2% -24.7% -22.2%
Other 6.1% 104.1% 53.5%

Note: Due to the small number of vacancies for the Canterbury region, it is likely that the vacancies for Canterbury are more volatile than at the national level.

Figure 7: Skilled Vacancies Index (SVI) for Canterbury by industry group, Seasonally adjusted (March 2010=100)

Figure 7: Skilled Vacancies Index (SVI) for Canterbury by industry group, Seasonally adjusted (March 2010=100).

Data table for Figure 7

 

Strong growth in the past year in Canterbury for technicians and trades

Table 5 shows the growth in the number of skilled job vacancies across occupation groups for the Canterbury region. In August 2011, the professionals occupation group saw the highest growth (up by 9.0%) followed by managers (up by 6.1%). Technicians and trades was the only occupation group to show a decrease in August (down by 3.3%). This is consistent with the drop in job vacancies in the construction and engineering industry in this region. Despite this drop in August, the technicians and trades occupation group showed the strongest growth in job vacancies over the past year (up by 92.0%) and since January 2011 (up by 58.0%) due to the reconstruction activities.

Table 5: Skilled Vacancies Index (SVI) for Canterbury by major occupation group, seasonally adjusted

Industry Monthly change
(Jul 11-Aug 11)
Annual change
(Aug 10 – Aug 11)
Change since January
(Jan 11- Aug 11)
Professionals 9.0% 41.1% 43.0%
Managers 6.1% 68.8% 35.6%
Technicians and trades -3.3% 92.0% 58.0%

Note: Due to the small number of vacancies for the Canterbury region, it is likely that the vacancies for Canterbury are more volatile than at the national level.

Beveridge curve for Canterbury: matching people to job vacancies[2]

The following graphs show the relationship between job vacancies and unemployment in the overall economy and in Canterbury. This is known as the Beveridge curve[3]. The vacancy rate is measured by the total number of advertised vacancies from Jobs Online divided by the total number of employed people from the Household Labour Force Survey (HLFS). The unemployment rate comes from the HLFS.

Beveridge curves for New Zealand and Canterbury (Sep 07-Jun 11), seasonally adjusted

Figure 8: Canterbury

Figure 8: Canterbury.

Data table for Figure 8

 

Figure 9: New Zealand

Figure 9: New Zealand.

Data table for Figure 9

 

Sources: Jobs Online, Department of Labour; Household Labour Force Survey, Statistics New Zealand.


Figure 8 shows that, prior to the earthquakes, it appeared that Canterbury roughly followed the normal Beveridge curve pattern and was recovering from the recession with falling unemployment and rising job vacancies. Following the earthquakes, the region saw both high unemployment and high job vacancies. This is not unusual at the tail end of a recession as unemployment is sluggish to adjust. A similar pattern was seen nationally (see Figure 9) and in other regions. It is too early to say if this indicates a long term mismatch between job vacancies and the people looking for work, but a structural change like this would cause the Beveridge curve to shift.

There is a range of possible explanations as to why the Canterbury labour market in particular is currently “off the curve”, including:

Nationally the labour market is gradually improving

The latest results for Jobs Online indicate a gradually improving labour market with increasing demand for skilled labour. This was echoed in NZIER’s latest Quarterly Survey of Business Opinion (QSBO) for the June quarter, which showed skilled labour is becoming more difficult to find. A net 15% of firms reported they had found it difficult to find skilled labour in the June 2011 quarter, up from a net 10% in the March 2011 quarter.

Jobs Online indicates that employment prospects have improved over 2011, although growth in job vacancies has eased compared with a year ago. This was echoed in the latest National Bank Business Outlook (NBBO) results which show that hiring intentions generally have remained positive although eased slightly from the high levels seen earlier. Employment intentions were down by 10 percentage points in July, with a net 9.1% of firms now expecting to increase staff numbers in the next 12 months. Hiring intentions decreased in most sectors except retail.

The economy is doing better than expected and firms are looking to hire. The economy improved by 0.8% over the March 2011 quarter, and the December 2010 quarter result was revised up to 0.5%.

Over the next year, we expect the labour market to continue to recover, although any significant improvement in labour market conditions is not expected until later in 2012 when economic growth is forecast to strengthen. Various business surveys also show positive employment intentions going forward. Future growth in the economy may be constrained by the volatile global economic climate[4].

Methodology

Jobs Online has two main indices: the All Vacancies Index (AVI) and the Skilled Vacancies Index (SVI). The AVI includes all listed job vacancies from data providers while the SVI includes job vacancies of skilled occupations only, using skill levels 1-3[5] under the Australian and New Zealand Standard Classification of Occupations (ANZSCO). The results are presented as an index that measures changes in the number of online job vacancies.

The key outputs from this report focus on skilled job vacancies. Jobs Online is highly representative of job vacancies for skilled occupations.

Job vacancies are highly seasonal: for instance, there is usually a substantial fall in the numbers of jobs advertised during December and then a small increase in February. To remove such seasonality, the Jobs Online data reported here is seasonally adjusted[6], allowing us to compare figures between months.

For more information on Jobs Online, see the Background and Methodology report at http://www.dol.govt.nzmethodology.

For further information please visit http://dol.govt.nz or email research@mbie.govt.nz.


[1] Skilled occupations are defined as skill levels 1-3 under the Australia New Zealand Standard Classification of Occupations (ANZSCO) 2006. Skill level 3 is equivalent to an NCEA level 4 qualification.

[2] For more analysis on Canterbury the Likely Areas of Growth in Employment Opportunities report will be available shortly at http://dol.govt.nz/publications/research/growth-employment-opportunities/index.asp.

[3] The Beveridge curve illustrates that a low vacancy rate is associated with high unemployment and a high vacancy rate is associated with low unemployment.

[4] See the latest Labour Market Update - September 2011 at http://dol.govt.nz/publications/lmr/lmr-labour-market-update.asp

[5] Skill level 3 is equivalent to an NCEA level 4 qualification. Vacancies for occupations outside these groups are much less likely to be advertised and may not be representative of labour market changes.

[6] The impact of regular seasonal influences in the data was removed while retaining the real ups and downs in the labour market.