Skillsinsight: Future employment demand by major skill categories
This SkillsInsight report presents findings from the Department of Labour's (the Department) employment forecasts for the medium term (4 years to 2013) and long term (9 years to 2018) across five broad skill levels using the New Zealand Standard Classification of Occupations (NZSCO). NZSCO is a skills-based classification that categorises all the occupations that exist in the New Zealand labour market.
Examples of occupations in each of the four broad skill categories used in this report are:
- Highly-skilled: Legislators, administrators, managers, and professional occupations
- Skilled: Technicians and associate professionals, trade workers
- Semi-skilled: Clerks, service and sales workers, agriculture and forestry workers
- Elementary: plant and machinery operators and assemblers, and general labourers
This report is one of several reports prepared as a supplement to the SkillsInsight tool. For any questions about the data contained in this report or the analysis available from the Department of Labour, please contact email@example.com.
2. Medium term employment forecasts to 2013
Employment growth forecast to slow
From 2003 to 2008 New Zealand experienced strong economic growth. As a result of this, employment grew by 2.6 percent per annum during the economic upturn.
The link between economic growth and employment growth was clearly seen during the downturn in 2008 to 2009 when employment growth slowed to 0.7 percent. Department of Labour employment forecasts show that total employment growth will remain at low levels of 0.5 percent per annum until 2013 due to the slowdown in economic activity across various sectors.
Strong employment growth for some workers
Even though the Department's employment forecasts show a relatively smaller growth for total employment in the medium term, employment of highly-skilled workers and skilled-associate workers is expected to experience strong growth compared with workers with other occupational skill levels.
Figure 1: Historical (2003 - 2008 & 2008 - 2009) and forecast (2008 - 2013) annual average employment growth, for March years by occupational skill levels
Industries with a high proportion of highly-skilled and skilled-associate workers are likely to be less affected in the medium term compared with industries that employ a high proportion of skilled-trades, semi-skilled, and elementary level workers.
Job losses for some workers
Recessionary periods usually more heavily affect those industries employing skilled-trades, semi-skilled, and elementary level workers. This factor and declining shares of some occupations, have contributed to the forecast decline in these skill categories.
In the year ended March 2009, when the economy was experiencing recessionary pressures, skilled-trades workers were affected more than any other skill group, with employment declining by 9.1 percent. The manufacturing, construction and retail trade industries contributed most to the job losses in the skilled-trades workers.
However, when these industries start to emerge from the recession, skilled-trades and semi-skilled workers will experience less of a decline in employment in the medium term to 2013. The Department's forecasts suggest a 5.2 percent decrease in employment per annum for skilled-trades workers to 2013 which is slightly better than the 2008 to 2009 period.
3. Longer term employment forecasts to 2018
Employment forecast is for modest change
While employment levels are expected to fall for a number of occupations in the medium term, employment forecasts through to 2018 are for modest declines in these occupations. Employment for skilled-trades workers, for example, is expected to decline by 5.2 percent per annum in the medium term to 2013, but this decline reduces to 3.0 percent per annum when viewed over the longer term to 2018.
Figure 2: Historical (2003-2008) and forecast (2008-2013 & 2008-2018) annual average employment growth, for March years by occupational skill levels
Source: Department of Labour Employment Estimates and Forecasts
4. Drivers of future growth
The growth forecast for workers in some categories is being driven by a combination of factors. Examples of drivers include:
- A shift in industrial structure
- Technological advances that can act as complements for highly skilled labour but are a substitute for lesser skilled workers
- An ageing population leading to greater demand for some services.
Specialised managers driving growth in highly-skilled workers
The growth for highly-skilled workers is being driven by strong demand for specialised managers, with an expected increase of 73,000 workers over five years from 2008 (a growth rate of 6.1 percent per annum). This is an increase from the recent employment growth experienced in this occupation group over the last five years to 2008 of 4.1 percent.
Specialised managers include individuals who manage a specific activity and are not restricted to those who manage other staff. They are also spread across a wide range of industries including marketing and business management services, accommodation, supermarket and grocery stores and real estate agents.
Figure 3: Forecast employment growth for selected highly-skilled occupations (Absolute value, 2008−2013)
Source: Department of Labour forecasts
One possible explanation for the growth in this occupation group may be a shift in the way in which workers report their occupation title as well as an increase in job titles which relate to management. In recent years there has been marked growth across a number of detailed occupations including sales and/or marketing managers, administration managers and advertising and public relations managers.
Skilled-associate workers will also grow
Skilled-associate workers are also expected to experience above average employment growth through to 2013. The growth will be most pronounced for writers, artists, entertainment and sports associate professionals, social work associate professionals (e.g. social workers, probation workers, teacher aides) and finance and sales associate professionals (e.g. sales representatives, business services representative).
Small overall growth for elementary level workers
The small projected growth of elementary level workers is being driven by demand for building caretakers, labourers and packers, and freight handlers. In contrast, agricultural, earthmoving and other materials-handling equipment operators and assemblers are all expected to experience a decline in employment through to 2013.
5. Drivers of future declines
Decline in the building and construction industry is driving changes in skilled-trades workers
Job losses are expected to occur across the majority of skilled-trades occupations in the medium term to 2013. Occupations likely to be particularly hard hit are those within the building construction industry. This includes building frame and related trades workers, with an expected decline of 3,000 employees and building finishers and related trades workers with an expected loss of 4,000 jobs. This reflects the downturn in the housing market over the past year with a 49 percent drop in the number of new dwellings authorised since June 2007.
Figure 4: Forecast employment for selected skilled-trades workers (Absolute value, 2008 to 2013)
Source: Department of Labour forecasts
Semi-skilled workers - declines across a range of occupations
Semi-skilled workers are also likely to experience job losses in the medium term to 2013. The most affected occupations are secretaries and keyboard operators, cashiers, tellers and related clerks and housekeeping and restaurant service workers. The exception to this trend is personal care workers (e.g. ambulance officers, caregivers, nurse aides) who are expected to experience strong employment growth over this period.
Some industries are feeling recessionary pressures more than others, with a decline in the share of some occupational groups within some industries. The decline in occupational share is often due to changing work practices that are driven by technological developments and the need to improve efficiency.
After strong growth from 2003 to 2008, employment growth is expected to be modest through to 2013. However, it is forecast to remain strong for some groups of workers, particularly those in highly-skilled occupations.
The forecasts indicate that employment growth will be lower in the medium term to 2013, and will start to increase in the longer term to 2018.
 For occupational classification structure refer to New Zealand Standard Classification of Occupations, 1999 Manual
 Department of Labour forecasts, September 2009.
 Employment growth refers to annual average employment growth. Annual years are March ended years
 Trends in employment growth for skilled-associate workers and skilled-trade workers were markedly different. As a result, these two groups are shown separately in this report.