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Labour market situation

Here’s our take on the New Zealand labour market as at August 2014, and what’s likely to happen in the coming year.

Key labour market indicators and trends

  • The unemployment rate fell by 0.3% to 5.6% in the June quarter (the three months to June 2014).
  • The number of people in employment rose by 10,000 (0.4%).
  • Auckland and Canterbury are experiencing the greatest labour market growth.
  • The Canterbury rebuild is now in full swing, creating demand for people working in construction and associated industries.
  • The percentage of 15 to 24 year olds not in employment, education or training (NEETS) fell from 11.9% to 11.1% in the June quarter – the lowest level since 2008.
  •  In the year to June, the unemployment rate for Māori dropped from 12.8% to 11%, and for Pasifika it dropped from 16.3% to 11.4%.

Unemployment continues to fall in most regions

A hand with a yellow post-it note stuck to it saying 'Job wanted'
Unemployment fell to 5.6% in the June 2014 quarter

The unemployment rate fell to 5.6% in June and is now at its lowest point since March 2009. Over the year to June, the number of people unemployed decreased by 17,000, or 10.9% – the largest annual decline in unemployment since 2004.

The regions with the lowest unemployment rates were all in the South Island:

  • Canterbury – 2.8% (down 1.2% over the year)
  • Southland – 3.1% (-1.8%)
  • Otago – 3.3% (-3%).

The regions with the highest unemployment rates were:

  • Northland – 8.3% (up 0.8% over the year)
  • Manawatu-Whanganui – 7% (1.9%)
  • Gisborne/Hawke’s Bay – 6.7% (0.9%).

 Unemployment in the South Island (3.2%) is almost half of that in the North Island (6.2%).

Strongest employment growth in Auckland and Canterbury

A roofer hammering a batten to a roof he is repairing
Construction is driving employment growth in Canterbury

Auckland and Canterbury continue to lead the way in employment growth. In the year to June:

  • employment in Auckland was up 21,200, or 2.9%, representing 26% of total New Zealand employment growth. More than half of this growth was in wholesale trade, which increased by 13,000.
  • employment in Canterbury was up 37,200, or 11.5%, representing 45% of total employment growth. Most of this growth was in three industries: retail trade, accommodation and food services (up 12,400); construction (up 10,300); and public administration and safety (up 6,100).

Unemployment in the same period also fell from:

  • 6.7% to 6.2% in Auckland
  • 4.4% to 2.8% in Canterbury.

In Canterbury, increasing employment is being driven by building work associated with the rebuild following the 2010 and 2011 earthquakes. After simmering along for many months, the rebuild hit full stride in the first half of 2014. The rebuild will likely be a major influence on national employment figures until at least 2018.

Immigration New Zealand's Canterbury skill shortage list highlights occupations in shortage that are needed during the Canterbury rebuild.

Some industries up, some down

A small inshore fishing boat berthed at a wharf
Agriculture, forestry and fishing experienced the greatest decline in employment in the June quarter

Some industries are performing better than others, and this is reflected in job growth.

The industries that showed strongest employment growth over the year to June were:

  • construction – up 29,600 (16.8%)
  • wholesale trade – up 16,800 (20.3%)
  • professional, scientific, technical, administrative and support services – up 11,500 (4.4%)
  • public administration and safety – up 11,000 (9%)
  • education and training – up 9,800 (5.1%).

The industries that saw the greatest declines in employment were: 

  • agriculture, forestry and fishing – down 8,500 (-5.8%)
  • information, media and telecommunications – down 7,900 (-16.8%)
  • financial and insurance services – down 1,800 (-2.6%)
  • transport, postal and warehousing – down 1,400 (-1.3%)
  • rental, hiring and real estate services – down 700 (-1.8%).

Outlook: economy to slow, but unemployment expected to keep falling

Most economists are predicting economic growth will slow in the last quarter of 2014 and over 2015. Economic growth is forecast to drop to about 2.9% in 2015, from 3.8% in 2014.

However, the general consensus is that this is more a case of things levelling out after a period of strong growth, rather than something to be overly concerned about. One commentator has likened the slowing of the economy to moving from a gallop to a more sustainable canter. 

This expected levelling off of the economy has seen business confidence slip from the record highs reached at the beginning of 2014. Employers’ hiring intentions have also fallen since the beginning of 2014.

However, business confidence and hiring intentions are still strong by historic levels, and The Treasury expects the unemployment rate to fall to about 5.2% by March 2015.


  • ANZ, 'ANZ Economic Outlook – Glide Path’, June 2014, (www.anz.co.nz).
  • Hudson, ‘New Zealand Hiring Expectations – Quarter 3, 2014’, November 2013, (www.nz.hudson.com).
  • Ministry of Business, Innovation and Employment, ‘Jobs Online Monthly Report – July 2014', August 2014, (www.mbie.govt.nz).
  • Ministry of Business, Innovation and Employment, ‘Quarterly Labour Market Report – July 2014’, August 2014, (www.mbie.govt.nz).
  • Statistics New Zealand, ‘Household Labour Force Survey – June 2014 Quarter’, August 2014, (www.stats.govt.nz).
  • Statistics New Zealand, ‘Quarterly Employment Survey – June 2014 Quarter’, August 2014, (www.stats.govt.nz).