EMPLOYMENT

Employment growth has varied considerably by region, both over the last five years and the most recent year. A number of factors contribute to the variation in employment growth seen across different regions such as age, education levels, population growth and industry structure. Changes in the participation rate can also affect employment growth.

Employment growth

Over the five years to September 2009, employment growth has been the strongest in the Waikato and Wellington regions, increasing by an average of 3.3% and 2.2% per annum respectively. The strong rise in employment for Waikato has been due to strong growth in health & community services, property & business services and construction. The Canterbury and Taranaki regions have also enjoyed above average growth in employment over this period.

The only region not to experience growth in employment between 2004 and 2009 was the Otago region with employment falling by 1,400 people. Despite the decline in employment, the Otago region has the fourth lowest unemployment rate which has remained relatively steady over the past five years. The fall in employment appears to be due to a fall in the working-age population in the region.

Table 5: Employment indicators, years to September 2004 and 2009

	Employment growth		Employment rate
	Annual average % change 2004-09	Annual average % change 2008-09	2004	2009
Northland	1.6%	-0.7%	57.1%	58.4%
Auckland	1.5%	-2.8%	64.0%	64.1%
Waikato	3.3%	-1.9%	65.4%	65.3%
Bay of Plenty	0.7%	3.9%	61.3%	61.1%
Gisborne/Hawke's Bay	1.1%	-0.6%	60.5%	62.2%
Taranaki	2.1%	-4.1%	62.7%	64.6%
Manawatu-Wanganui	1.1%	2.6%	59.9%	63.1%
Wellington	2.2%	3.0%	64.9%	67.5%
T/N/M/WC	1.6%	2.9%	64.7%	65.8%
Canterbury	2.1%	-1.3%	66.6%	66.5%
Otago	-0.3%	8.6%	63.4%	63.2%
Southland	1.5%	-0.2%	65.9%	70.6%
New Zealand	1.7%	-0.3%	63.8%	64.7%

Source: Household Labour Force Survey, Statistics New Zealand. Note some data may not sum due to rounding. All data are averaged over a year to reduce sample error and seasonal variations.

More recently, nationwide employment growth has slowed as economic activity has fallen. However, despite annual economic activity falling by 1.8% in the year to June 2009, employment has fallen by only 0.3% over the past year on an annual average basis. Five out of the twelve regions experienced a rise in employment over the past year, with all five recording a rise in employment of 2% or more.

Driving the weak overall figure is the Auckland region, with employment falling by 2.8%, or more than 19,000 people, over the past year. If Auckland is excluded, employment in the rest of the country actually increased by 0.9%, or 13,700 people. The fall in employment in Auckland has largely been due to job losses in manufacturing and retail trade but there has also been a large decline in the number of people employed in Auckland's finance & insurance industry.

Employment rate

Because employment growth is often driven by increases in the population, a more preferable indicator for regional comparison is often the employment rate (or employment to population ratio). The employment rate takes into account the large variance in population growth across the twelve regions.

In the year to September 2009, Southland had the highest employment rate at 70.6%, followed by Wellington at 67.5%. Canterbury, Waikato and Tasman/Nelson/Marlborough/West Coast also recorded rates above the national average of 64.7%. Northland had the lowest employment rate with only 58.4% of the working-age population in employment, followed by the Bay of Plenty at 61.1%. These two regions also have the lowest labour force participation rates. The high proportion of those aged 65 and over in these regions (who are less likely to participate in the labour force or be in employment) contributes to these low rates.

The largest increases in the employment rate over the past five years were in Southland (4.7 percentage points), Manawatu-Wanganui (3.2 percentage points) and Wellington (2.6 percentage points). The employment rate rose across eight of the twelve regional councils, with Canterbury, Otago, Bay of Plenty and Waikato all recording small declines of between 0.1 and 0.3 percentage points.

Regional differences

The difference between the lowest and highest employment rates by region has increased compared to five years ago. In the year to September 2004, there was a 9.6 percentage point difference between the highest region (Canterbury) and the lowest (Northland). In 2009, the difference between the highest (Southland) and the lowest (Northland) was 12.2 percentage points. As with many other indicators, regional differences generally reduced between 2004 and 2008 as the labour market performed strongly. However, they have since widened as the labour market has weakened over the past eighteen months.

Figure 2 shows the employment rate for the September 2009 year as well as the growth rate that each region has experienced over the 2004-2009 period. Regions in the upper right quadrant of Figure 2 had relatively high employment rates in 2009 and experienced high growth in the employment rate between 2004 and 2009 and therefore could be considered strong performers. This includes regions such as Southland and Wellington. Regions in the lower left quadrant, such as Bay of Plenty, have experienced weak growth in the employment rate and currently have a relatively low employment rate. They should therefore be considered poorer performers. Northland, which currently has the lowest employment rate, has recorded a larger than average rise over the past year, while Canterbury and Waikato are coming off a relatively high position.

Figure 2: Employment rate (2009) and change in the employment rate (2004-09)

Data Table for Figure 2

Source: Household Labour Force Survey, Statistics New Zealand.

Note all data are averaged over a year to reduce sample error and seasonal variations.

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