Purpose

This report informs you about the Household Labour Force Survey (HLFS) results for the September 2011 quarter, which were released on 3 November 2011.

Key results

• The HLFS showed that employment grew by 0.2% over the September 2011 quarter and by 1.1% over the year.

• Actual hours worked rose by 1.0% in the quarter.

• The unemployment rate rose slightly to 6.6% during the quarter. This was largely because of a small rise in the labour force participation rate from 68.3% to 68.4%.

• New Zealand has the 12th lowest unemployment rate of the 34 OECD countries and is below the average OECD rate of 8.2%.

• Employment falls in Canterbury over the year were more than balanced by very strong employment growth in Auckland.

Structure of the Labour Market: september 2011 quarter (seasonally adjusted)

Long Description For Figure

COMMENTARY

Labour market is slowly recovering...

The latest HLFS results confirmed that the labour market continued to recover in the September 2011 quarter, with 5,000 (0.2%) more people employed and an increase in labour force participation.

Employment kept pace with population growth, but increasing labour force participation led to an increase in both unemployment and the unemployment rate.

This quarter’s employment growth was characterised by a 0.4% increase in full-time employment and a 0.6% fall in part-time employment. Actual hours worked increased by 1.0% during the quarter, in line with the rise in full-time employment.

The underlying trend continues to show a gradually improving labour market. Employment is 1.1% higher than a year ago, and labour force participation has increased. The unemployment rate remains below its December 2009 quarter peak. Rising wage growth and high employment intentions show a gradual strengthening in the demand for labour over the past year.

Employment falls in Canterbury over the year were more than balanced by very strong employment growth in Auckland.

...with modest employment growth...

Employment increased by 5,000 people (0.2%) in the September 2011 quarter (see Figure 1), at the bottom end of market expectations.  Employment growth was driven by a 0.4% increase in full-time employment, while part-time employment fell by 0.6%. Part-time workers are more likely to be female. Consequently, female employment fell by 0.4% while male employment grew by 0.8%.

Fig 1: Employment growth

Source: HLFS, Statistics New Zealand

Data Table for Figure 01

Fig 2: Unemployment & participation rate

Source: HLFS, Statistics New Zealand

Data Table for Figure 02

Annually, employment grew by 1.1%. Most of this growth was in Auckland, where employment grew by 58,900 people (9.1%). Employment in Canterbury fell by 26,800 people (8.0%).

Notably, employment in the finance, insurance, education, healthcare, and public administration sectors grew strongly over the year to September 2011. Employment in retail and hospitality fell over the year, which was driven by Canterbury. Outside of Canterbury, employment in retail trade and accommodation increased by 3,100 people (1.1%).

…but a small rise in unemployment

The labour force participation rate rose to 68.4% in the September quarter (see Figure 2), suggesting people’s confidence in the labour market is improving. The growth in employment was enough to match population growth during the quarter, but this rise in participation led to a rise in the unemployment rate to 6.6%.

The female unemployment rate rose from 6.7% to 7.0% while the male unemployment rate fell from 6.4% to 6.3% during the quarter.

At 6.6%, New Zealand has the 12th lowest unemployment rate in the OECD, well behind the OCED average unemployment rate of 8.2%.

Canterbury results were weak…

Employment in Canterbury fell by 26,800 people (8.0%) during the year. This was largely driven by decreases in female employment. Females tend to be over-represented in the retail and hospitality sectors, which have been particularly hard hit by the earthquakes. Employment in the retail trade, accommodation and food services industry fell by 12,600 people (22.4%) during the year.

Canterbury unemployment increased slightly, by 900 people (or 5.3%) and the unemployment rate increased to 5.5% over the year. However, Canterbury still has a lower unemployment rate than most other regions.

The fall in employment did not flow through to a large rise in unemployment. Instead, it appears that people have either left Canterbury or dropped out of the labour force. The Canterbury working-age population fell by 13,500 people (2.7%) over the year. Labour force participation also fell in Canterbury, with the number of people not in the labour force increasing significantly over the year. 

…but were balanced by very strong growth in Auckland

Employment in Auckland grew by 58,900 (9.1%) and the unemployment rate fell from 7.4% to 6.8% during the year.

Northland, Waikato, Wellington, Canterbury and Otago experienced large increases in their unemployment rates during the year (see Figure 3).

Fig 3: Unemployment rates by region

Source: HLFS, Statistics New Zealand

Data Table for Figure 03

Slight improvement in 15 to 19 year-old NEET rate

Labour force participation among 15 to 19 year-olds fell during the year, with falls in both employment and unemployment. The NEET rate¹ for 15 to 19 year-olds also fell from 8.3% to 7.2% during the quarter. It is now only slightly above the average for the three years prior to the recession (September 2004-2007) of 6.8%. This indicates that more 15 to 19 year-olds are choosing to either return to or remain in study and are not looking for work.

Labour force participation among 20 to 24 year-olds rose during the year, with employment increasing by 7,800 people (3.9%) and unemployment increasing by 2,200 people (8.1%). The NEET rate1 for this age group increased from 11.0% to 11.7% during the quarter.

The unemployment rate for Maori young people (15 to 24 year-olds) was 25.7% in the September quarter, down from 26.8% a year ago. The unemployment rate for Pacific young people decreased slightly from 29.8% to 29.6% over the year.

Maori unemployment rate dropped

The unemployment rate for the ‘Maori only’ ethnic group was 15.1% in the September 2011 quarter (down from 16.2% a year ago) and 13.8% for the ‘Pacific peoples only’ ethnic group (up from 13.5% a year ago).

Employment for the ‘Maori only’ ethnic group increased by 3,600, or 2.7%, over the year to September 2011. Employment increased sharply for the ‘Pacific peoples only’ ethnic group, up by 11,700 or 15.7% over the year.

The labour market recovery is expected to continue

The September 2011 quarter HLFS showed that the labour market has strengthened this year.

Looking at the broader range of labour market data, employment intentions remain positive and wage growth is recovering. However, growth in the number of online job advertisements has eased. The overall trend is that the labour market is gradually recovering.  

The Department expects the labour market will continue to recover, albeit at a slower pace than previously thought, due to increasing global uncertainty. However, economic growth is forecast to strengthen more rapidly as the Canterbury rebuild gains momentum. Continued growth in employment is expected to see the unemployment rate continue to trend down slowly, falling below 6% in the first half of 2012 to under 5% by the end of 2013.

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