Employment & unemployment - September 2006

Last updated 9 November 2006

Background

This report informs you about the Household Labour Force Survey (HLFS) results for the September 2006 quarter. The HLFS was released by Statistics New Zealand on 9 November 2006. All figures refer to the working-age population (15 years and over) and are seasonally adjusted unless otherwise specified. Terms are defined in the appendix.

Key points

New Zealand labour eased slightly this quarter...

The New Zealand labour market eased slightly in the September 2006 quarter following relatively strong growth earlier in the year. A decline in employment, particularly of part-time females contributed to unemployment rising slightly from a record low the previous quarter. The participation rate also fell from a record high.

However, the results for some groups went against the overall trends. Unemployment fell for both Maori and Pacific People with the year to September 2006 Maori unemployment rate the lowest since the HLFS began in 1986.

The results are in line with a slowing of economic activity and average market predictions of a weakening of employment and a decrease in the unemployment rate.

...as employment declined...

The September 2006 quarter saw a decline of 0.4% in employment. This follows strong employment growth of 1.2% in the March 2006 quarter and 0.9% in the June 2006 quarter, resulting in annual growth of 1.5% in the year to September 2006 similar the growth recorded for the year to December 2005 (Figure 1).

The decrease in employment was caused by both full-time and part-time employment. A fall in full-time work of 5,000 people combined with a decline of 4,000 people in part-time work (fewer than 30 hours a week).

The decline in employment was almost solely due to a decrease in female employment. There were 9,000 fewer females employed in the September 2006 quarter while the number of males employed remained unchanged.

Fig 1: Employment growth

Data table for Fig 1
Source: HLFS, Statistics New Zealand

Fig 2: Unemployment & participation rates

Data table for Fig 2
Source: HLFS, Statistics New Zealand

... the unemployment rate increased...

The unemployment rate increased from 3.6% to 3.8% in the September 2006 quarter (Figure 2).The unemployment rate has been relatively stable since falling below 4% in the second half of 2004.

New Zealand's unemployment rate slips to the fourth equal lowest of the 27 OECD nations with comparable data, but remains one of only five countries below 4.0%. South Korea and Norway shared first place at 3.4%, with Denmark and the Netherlands the other countries below 4.0%. The OECD average remained steady at 6.1%.

Underemployment (part-timers who want to work more hours) remained at 71,900 in the September 2006 year. This is the lowest number of underemployed since the question was first asked in 1990.

...and the participation rate fell from the previous quarter's record high

The labour force participation rate fell from 68.7% to 68.3% in the September quarter. This fall follows a large rise in the participation rate in the first half of 2006. The fall was driven by female participation (from 62.1% to 61.3%) while male participation remained fairly steady (75.5% compared to 75.7%). Despite the decrease this quarter the participation rate remains at the third highest rate since HLFS began in 1986.

Labour market indicator Dec 2005 Mar 2006 Jun 2006 Sep 2006

Labour market indicator	Dec 2005	Mar 2006	Jun 2006	Sep 2006
Working-age population (000s)	3,189	3,203	3,212	3,222
quarterly % change	0.4	0.4	0.3	0.3
Employment (000s)	2,085	2,108	2,129	2,118
quarterly % change	0.0	1.1	1.0	-0.4
Unemployment (000s)	79	86	79	83
quarterly % change	-0.6	9.9	-8.5	5.5
Labour force participation rate (%)	67.9	68.5	68.8	68.3
Unemployment rate (%)	3.6	3.9	3.6	3.8

 

 

Employment changes across several industries

Despite the decline in employment in the September quarter a number of industries continued to experience increases. Construction has had the largest increase of any industry over the last year (11.5%) and continued to grow in the September quarter. Primary industries including agriculture, forestry, and fishing also continued with a recent upward trend in employment growth. However, employment continued to decline in manufacturing, while the hospitality sector experienced a drop in annual average employment for the first time since December 2004.

All regions have an unemployment rate at or below 5%

The unemployment rate was equal to or below 5% in all regions in the year to September 2006 with the largest fall between the years to September 2005 and 2006 occurring in Gisborne Hawke's Bay (5.1% to 4.1%). The lowest unemployment rate was recorded at 2.9% jointly in Canterbury and Southland. Northland still has the highest unemployment rate of 5.0% in the year to September 2006, followed by Wellington at 4.6% (Figure 3). However, the latter region also recorded a significant increase in the participation rate by 1.3% to 69.6%, the third highest after Canterbury and Southland.

Fig 3: Unemployment rates by region

Data table for Fig 3
Source: HLFS, Statistics New Zealand

Fig 4: Unemployment rates by ethnicity

Data table for Fig 4
Source: HLFS, Statistics New Zealand

Unemployment rate trends down for Maori and Pacific Peoples

The unemployment rate for Maori fell to 8.0% in the year to September 2006 (Figure 4). This is the lowest rate recorded since the HLFS began in 1986. The annual average unemployment rate for Europeans remained in the 2.6%-2.8% band it has been in since December 2004, while the rate for Pacific Peoples declined to 6.2%, the equal lowest since March 1987.

Labour force participation rates remain high for all ethnicities. A participation rate of 67.2% in the September 2006 year for Maori is just off the highest rate of 67.3% recorded in the year to June 2006. The participation rate for Pacific Peoples continued to be at an 8-year high of 62.9%.

Higher participation and low unemployment for 15-24 year olds

The unemployment rate remained low at 9.3% for 15-24 year olds in the September 2006 year, similar to the 9.2% measured in June 2006, which was an 18-year low at the time. The participation rate rose further to a 7-year high of 64.6%. For 20-24 year olds the unemployment rate went up slightly to 6.4% from 6.1% in the year to June 2006, while the participation rate reached 75.6%, the highest since June 1999. The rate of unemployment for 15-19 year olds remained steady at 13.1% in the year to September 2006, but their participation rate declined slightly by 0.4% to 54.9% compared to the year to June 2006

 

Fig 5: Labour Market Summary

Long description for Fig 5