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Labour Market Statistics: December 2015 quarter
Embargoed until 10:45am  –  03 February 2016

Unemployment rate falls to 5.3 percent

The unemployment rate fell 0.7 percentage points, to 5.3 percent, in the December 2015 quarter. This is the lowest unemployment rate since March 2009 (when it was 5.2 percent). This fall reflected 16,000 fewer people being unemployed over the quarter.

Compared with the December 2014 quarter, there were 10,000 fewer unemployed people – the unemployment rate fell 0.5 percentage points (from 5.8 percent).

The trend series shows the unemployment rate decreased from 5.8 percent to 5.5 percent in the December 2015 quarter. The trend series removes both the seasonal and irregular component of the series and reveals the underlying direction of movement. 

The likelihood that an unemployed person would enter into employment, from one quarter to the next, increased in the December 2015 quarter compared with the same time in 2014. 


Falling participation contributes to lower unemployment

The labour force participation rate fell 0.3 percentage points over the latest quarter (to 68.4 percent), and 1.0 percentage point over the 2015 year – down from a record high in the March 2015 quarter. This is the third quarter in a row in which labour force participation has fallen.

The drop in labour force participation (coupled with a rise in employment) has contributed to the fall in unemployment over the December 2015 quarter. 

Labour market summary

The drop in labour force participation was a result of the labour force growing at a slower rate than the working-age population. This gives rise to an increasing number of people not participating in the labour force; 14,000 more in the December 2015 quarter, and 61,000 over the year. This annual increase was partly from there being more people who were retired (up 31,500), and more people at home but not looking after children (up 15,400).

Unemployment rate improves for both men and women

The unemployment rate fall came from both fewer men (down 7,000) and women (down 9,000) being unemployed over the December 2015 quarter. This resulted in the unemployment rate for men falling 0.5 percentage points (to 5.0 percent) and that for women falling 0.8 percentage points (to 5.7 percent).

Over the 2015 year, the number of unemployed men was unchanged, while the number of unemployed women was down 10,000.

The fall for women came from both short- and long-term unemployment. Short-term unemployment is defined as being unemployed for 26 weeks or less, and long-term unemployment is 27 or more weeks.

There were 6,000 fewer women in short-term unemployment in the year to December 2015. Within short-term unemployment, there were 2,700 fewer who were unemployed for up to 13 weeks and 3,300 fewer who were unemployed for 14 to 26 weeks. Long-term unemployment fell by 3,900 women.

Unemployment rate down in North Island, and unchanged in South Island

In the year to December 2015, the unemployment rate for the North Island fell 0.6 percentage points, to 5.6 percent, while that for the South Island was unchanged, at 4.1 percent.

The gap between the North and South Island unemployment rates has been closing over the last three quarters, and is now the smallest since June 2012.

 nz map


Unemployment rates fall for Pacific peoples and Māori

The unemployment rate for Pacific peoples dropped over the 2015 year to 9.7 percent (from 11.4 percent a year earlier). This is the lowest rate since December 2008 when the unemployment rate was 7.7 percent. The number of Pacific peoples employed increased by 14,500 over the year, resulting in a 1.6 percentage point increase in the employment rate for Pacific peoples.

The unemployment rate for Māori fell 1.6 percentage points to 10.6 percent in the year ended December 2015. However, the employment rate for Māori fell 1.4 percentage points and labour force participation rate fell 2.8 percentage points, meaning that the number of Māori in the labour force has not kept up with growth of the working-age population.

Employment growth rises to 0.9 percent for quarter

The number of people employed grew 0.9 percent in the December 2015 quarter, with 21,000 more people employed than in the previous quarter. Employment growth was similar for men and women; 1.0 percent more women and 0.9 percent more men were employed over the quarter. Over the year, the number of people employed increased 1.3 percent (up 31,000).

The employment rate increased 0.3 percentage points (to 64.8 percent) in the December 2015 quarter, but compared with a year earlier it fell 0.6 percentage points.

The number of filled jobs reported by businesses from the Quarterly Employment Survey (QES) increased 1.0 percent over the December 2015 quarter, and 2.7 percent over the year.

Employment growth strong for 20- to 29-year-olds

Over the year to December 2015, the working-age population grew by 82,200 people (2.3 percent). Just over 40 percent of this population growth (34,100) was in the 20- to 29-year age group.

Employment growth was also strong for this age group, particularly for 25- to 29-year-olds. There were 8,000 more 20- to 24-year-olds, and 18,700 more 25- to 29-year-olds employed over the year to December 2015.

Annual employment growth was strong for both men and women aged 20 to 29 years – 16,900 more men and 9,900 more women in this age group were employed over 2015.

Employment growth for 45- to 49-year-olds was also significant, with 7,000 more being employed over the year.

Full-time and part-time employment both rise for men and women

Full-time employment grew 0.6 percent (11,000 people) in the December 2015 quarter. Full-time employment increased 0.5 percent for women and 0.6 percent for men.

Part-time employment grew 2.5 percent (13,000 people) over the latest quarter, recovering from a decline in the previous quarter. There was a 3.0 percent increase in part-time employment for women and a 2.1 percent increase for men.

The number of people who were underemployed decreased by 20,200 over 2015 – 13,900 for women and 6,300 for men. Underemployment refers to part-time workers who are willing and available to work more hours than they usually do.

Employment growth picks up in Auckland

Annual employment growth in Auckland increased 2.9 percent in the December 2015 quarter, after dropping to 1.5 percent last quarter. This came from 23,100 more people being employed in Auckland over the year. Manawatu-Wanganui and Wellington also had employment growth over the year (up 8,600 and 6,800, respectively).

Construction still leads employment growth

The construction industry was the largest contributor to annual employment growth, with 27,500 more people employed over the year to December 2015. This is up from the September quarter’s annual growth of 20,500, but still down from a peak of 31,200 in the year to September 2014.

The majority of construction employment growth was in Auckland, with 18,900 more people employed over 2015. Canterbury and Bay of Plenty also contributed to employment growth in the construction industry (up 4,800 and 4,100, respectively).

Technicians and trade workers also had a large employment growth, with 20,800 more people employed in this occupation group over the year. More than half these workers were employed within the construction industry.

The largest contributions to the rise in filled jobs over 2015 (reported by business from the QES) came from construction (up 19,800), health care and social assistance (up 8,600), and accommodation and food services (up 7,500).

Number of jobless still rising

Despite the drop in the number of unemployed people, the number of jobless increased 1,800 (to 259,400) over 2015. The jobless include those officially unemployed, those available for but not actively seeking work, and people seeking but not available for work. This is a useful indicator of how many people are on the fringe of the labour market. The group of jobless people who are not officially unemployed made up 11.2 percent of those not in the labour force.

Jobless summary

NEET rate at lowest level since September 2008

The proportion of youth (15–24 years) not in employment, education, or training (NEET) fell 0.1 percentage points (to 10.9 percent) over the latest quarter. This was the lowest level since September 2008.

The NEET rate for 15- to 19-year-olds fell 0.2 percentage points to 6.5 percent – the lowest since the series began in March 2004. However, the NEET rate for 20- to 24-year-olds increased 0.1 percentage points (to 15 percent).

The NEET rate for women moved up 0.3 percentage points (to 12.6 percent), up from its record low of 12.3 percent in the September quarter, while the NEET rate for men dropped 0.5 percentage points (to 9.3 percent).

Annual wage inflation lowest since March 2010

QES hourly earnings and labour cost index (LCI) figures are not seasonally adjusted. In the year to December 2015 quarter:

  • The LCI (including overtime) increased 1.5 percent – the lowest annual increase since the year to the March 2010 quarter. (This measure of wage inflation reflects changes in the rates that employers pay to have the same job done to the same standard).
  • The unadjusted LCI increased 2.7 percent. (This allows for quality changes within occupations as well as wage inflation.)
  • Average ordinary-time hourly earnings increased 2.1 percent, down from 2.3 percent in the year to September 2015. (This measures the average hourly wage bill across all jobs in surveyed industries.)
  • Private sector annual wage growth was 1.6 percent – the lowest since September 2010. Public sector annual wage growth was unchanged, at 1.2 percent for the fifth consecutive quarter.

LCI continues to outpace inflation

In the year to December 2015, prices of goods and services bought by households, as measured by the consumers price index (CPI) increased 0.1 percent – the lowest annual increase since 1999.

See Consumer Price Index: December 2015 quarter.

The LCI salary and wage rates (including overtime) increased 1.5 percent over the same period. Wage inflation has now been higher or equal to the CPI for more than four years.

Quarterly mean increase of 2.5 percent is lowest in 22 years

Of all salary and ordinary time wage rates in the LCI sample, 54 percent rose in the year to December 2015, down from 55 percent last quarter and the lowest since March 2014. Over the quarter, 18 percent of all salary and ordinary time wage rates increased – this increase is similar when compared to previous December quarters.

Of the 54 percent that increased over the latest year, there was:

  • a median (middle) increase of 2.4 percent (the lowest since the year to the June 2014 quarter).
  • a mean increase of 3.0 percent (the lowest since the year to the March 2000 quarter).

Of the 18 percent that increased over the latest quarter, there was:

  • a median (middle) increase of 2.0 percent (the lowest since the March 2000 quarter).
  • a mean increase of 2.5 percent (the lowest since the December 1993 quarter).

Wage growth in Canterbury construction eases more than for rest of New Zealand

In the year to the December 2015 quarter, salary and wage rate growth (including overtime) in the Canterbury construction industry continued to ease, down to 1.4 percent. This compares with 2.6 percent at the same time in 2014.

For the rest of New Zealand, wage rate growth in the construction industry also eased, down to 1.9 percent from 2.4 percent at the same time in 2014.

In the year to the December 2015 quarter, the mean increase for surveyed salary and ordinary time wage rates that rose, in the Canterbury construction industry, fell below the rest of New Zealand for the first time since the series began in the September 2010 quarter.

The annual mean increases of the rates that rose for the December 2015 quarter were:

  • 3.6 percent for the Canterbury region
  • 4.0 percent for the rest of New Zealand.

For more detailed data about labour market statistics, see the Excel tables in the 'Downloads' box.


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