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The five years between 2004 and 2009 was a period of great change for the New Zealand economy.  Prolonged high levels of economic growth and record low unemployment rates have been followed by a severe global recession and rapidly rising unemployment.  These patterns have affected New Zealand’s regions to varying degrees. 

This report provides an overview of regional labour market trends for the five years to September 2009.  It presents key labour market statistics for each region and examines the extent to which regional labour market performance has changed. 

Southland and Wellington the best performing regions…

Almost regardless of what indicator is used, Southland has been the stand out performer over the past five years.  It is ranked highly both on its current labour market outcomes and on the improvement in these indicators over the past five years.  The region has consistently had a low unemployment rate over the past five years, and the current rate of 3.1% is the lowest among the twelve regions.  A low unemployment rate is especially remarkable given the region also has the highest labour force participation rate at 72.9%.  This means that not only is there a large proportion of the working-age population looking for work, but most of them are finding it. 

Wellington has also been a strong performer.  The region not only has the second highest labour force participation rate and employment rate, but an unemployment rate below the national average.  Wellington also has the highest median weekly earnings of any region – this can be attributed to its highly qualified population and high concentration of knowledge intensive industries which account for 42% of all people employed in the region. 

…followed by Taranaki…

Taranaki could also be described as a strong performer, although to a lesser extent than Southland and Wellington.  Taranaki was ranked above average on current labour market indicators and had performed strongly over the past five years. 

…and Canterbury…

Canterbury also ranked relatively highly with a below average unemployment rate of 4.7% and an above average labour force participation rate (69.8%) and employment rate (66.5%).  However, while Canterbury performed well on current labour market indicators, it was in the bottom half when examining the change in these indicators over the past five years.  This is likely to be due to its strong starting position.     

…with a number of regions producing results at the national average…

Tasman/Nelson/Marlborough/West Coast and Otago performed similarly to New Zealand as a whole, both on current labour market indicators and on the changes in these indicators over the past five years.  Both regions had better than average unemployment rates, although they also had below average labour force participation rates and below average median weekly earnings. 

Auckland and Waikato also performed similar to the national average when examining current labour market indicators.  However, what differentiates them from Tasman/Nelson/Marlborough/West Coast and Otago, is that both these regions have experienced weak growth in these indicators over the past five years.  For example, Auckland’s and Waikato’s unemployment rates have both increased at a rate much faster than the New Zealand average. 

…and four regions ranked the lowest…

Northland, Bay of Plenty, Manawatu-Wanganui and Gisborne/Hawke’s Bay were ranked the lowest on the key labour market indicators examined.  People in these regions are not only less likely to participate in the labour force but are also, in general, less likely to find a job if they do. 

...although they are generally catching up

With the exception of perhaps Bay of Plenty, a strong message from this analysis is the improvement in results in these regions over the past five years.  This was particularly true for the 2004 to 2008 period as the labour market performed strongly.  As a result, they have generally “caught up” with the rest of New Zealand.  Of concern however, is that the downturn in the labour market over the past eighteen months has particularly affected regions which have below average labour market outcomes, such as Northland and Gisborne/Hawke’s Bay.  The unemployment rate in these two regions has spiked sharply over the past year.  There is a risk that the current downturn causes regional differences and inequalities to increase and reverses the gains achieved over the prior four years.   

Northern regions leading the current easing in the labour market

As the labour market has eased over the past year, northern regions appear to have been the most affected.  Northland’s unemployment rate has risen from 4.7% to 8.3% while Gisborne/Hawke’s Bay, Bay of Plenty, Waikato and Auckland have all experienced larger than average increases in the unemployment rate.  The slowdown in employment over the past year has been driven by the Auckland region where employment has fallen by 2.8%, or more than 19,000 people, due to employment falling in manufacturing, retail trade and finance & insurance services.  

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