APPENDIX II: LABOUR MARKET INDEX

The labour market index used in this report is based upon four indicators: the reverse unemployment rate, the labour force participation rate, the employment rate and median weekly earnings. Each component of the index was calculated according to the following formula:

Index = (actual value of indicator - mean of indicator) / standard deviation of indicator

For example, the employment rate for Waikato is 65.3% and this part of the index would be calculated as below:

= (65.3 - 64.7) / 3.2

The results for each indicator were then summed together for each region into a single measure with each indicator in the index given an equal weight. The twelve regions were then ranked based on these results. With an index such as the one used below, it is the relative rankings rather than the absolute value of the index which is important. The results are presented below and are broken down into three groups - "high", "medium" and "low".

Labour Market Index

	Labour market index based on levels	Labour market index based on change
Southland	High	High
Wellington	High	High
Taranaki	High	High
Canterbury	High	Low
T/N/M/WC	Medium	Medium
Otago	Medium	Medium
Auckland	Medium	Low
Waikato	Medium	Low
Manawatu-Wanganui	Low	High
Gisborne/Hawke's Bay	Low	Medium
Northland	Low	Medium
Bay of Plenty	Low	Low

Source: Department of Labour.

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