Key Points

The results show that:

• employment increased slightly over the quarter, reflecting a steady recovery in the labour market, and
• the unemployment rate was unchanged at 6.5%, reflecting the slight increase in employment and a small fall in participation which fell to 68.4%, but is still at historically high levels.

Annual results for Canterbury went against the national trend, with the unemployment rate rising by 0.9 percentage points (3,000 people) over the year, although at 5.7% Canterbury unemployment is still below the national average.

What each scorecard dial shows

Labour demand dial: employment increased slightly

Employment increased slightly by 1,000 over the quarter. Employment for women increased by 0.3%, while male employment decreased 0.2%. Mining (19.4%), Electricity, Gas, Water and Waste (15%) and Finance/Insurance Services (10%) had the largest employment increases.

Actual hours worked increased by 1.6%. Taken together with a 0.2% rise in full-time employment and a 0.1% fall in part-time employment this indicates that firms are increasing the hours of their workers rather than taking on new staff.

Labour market matching dial: unemployment rate was unchanged at 6.5%

The unemployment rate remained flat at 6.5%. Unemployment rates for Māori and Pacific peoples have fallen over the past year. Long-term unemployed increased one percentage point over this time last year.

Youth (15 to 24-year-olds) unemployment decreased from 18.8% to 17.4% over the June 2011 quarter. The NEET rate (the proportion of 15 to 24- year-olds not in employment, education or training) was 9.8% for the year to June 2011, down from 10.7% a year ago. 

There are signs of a tightening labour market with a net 15% of firms finding it harder than it was three months ago to attain skilled staff.

Labour supply dial: participation declined slightly to 68.4%

Labour force participation decreased slightly in the June 2011 quarter, and declined by 1.7 percentage points for Māori. Participation for both men and women decreased this quarter.

Monthly net migration has been negative since March 2011, due to a jump in departures following the Christchurch earthquake. This has meant an easing in annual net migration from 16,500 in the year to June 2010, to 3,900 in the year to June 2011. The net loss of New Zealand citizens to Australia was 30,500 in the June 2011 year, substantially more than the 16,700 lost to Australia in the June 2010 year.

Labour quality dial: steady increase in workforce qualification levels

The qualification levels and skills of the New Zealand workforce will continue to increase as current young cohorts of highly educated people move through the age groups. High levels of participation in workplace-based training and other parts of the tertiary education sector are also increasing workforce skills.

Workplace performance dial: wage growth increasing slowly from low levels

The number of people working in highly-skilled occupations has steadily increased over recent years, although long-term productivity growth has remained stubbornly low.

Annual wage growth was 1.9% for the year to June 2011, with growth of 0.4% over the June quarter. This follows an annual wage growth rate of 1.9% for the year to March 2011, and is up from the nine-year low of 1.5% for the year to March 2010. Wage growth usually lags employment growth, and the wage inflation therefore reflects a slowly improving labour market following the 2008/09 recession.

Capital investment dial: other-than-residential capital investment declined on the last quarter, but is forecast to improve

Capital investment in fixed assets (other than residential) decreased by 1.0% over the March 2011 quarter, driven by a decline in investment in non-residential buildings and transport equipment. However, investment this quarter is up 11.8% on the same quarter last year, with a strong recovery forecast for the next two years. Improvements in capital investment should help New Zealand businesses take greater advantage of the economic recovery and improve productivity.

Short-term outlook

The statistics in the scorecard paint a slowly improving picture of the labour market for the June 2011 quarter. However, as economic activity gradually gathers momentum over 2012, employment growth is expected to rise strongly, bringing down the unemployment rate in 2012 and 2013.