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Labour Market Statistics: March 2016 quarter
Embargoed until 10:45am  –  04 May 2016
Commentary

Note about the redevelopment of the Household Labour Force Survey (HLFS)

In this Labour Market Statistics release, we are publishing the last set of results from the current version of the HLFS. A redeveloped version of the survey went into the field to collect data for the June 2016 quarter.

This redevelopment has been done to improve the relevance and quality of our labour force measures. The design of the new HLFS will also provide a better respondent experience when answering the questionnaire.

Improving labour market statistics has more information about the HLFS redevelopment. This page will be the main source of updates on the HLFS redevelopment, including information papers and other relevant data as it becomes available.

New Zealand's labour force grows 1.5 percent

The labour force increased 1.5 percent in the March 2016 quarter, with 38,000 more people in the labour force. This was the largest quarterly growth since December 2004.

The labour force participation rate increased 0.5 percentage points in the March 2016 quarter, up to 69.0 percent. This was the first increase since labour force participation reached a record high of 69.5 percent in December 2014.

Diagram, Labour market summary, March 2016 quarter.

Employment growth exceeds population growth

The working-age population increased 0.8 percent (29,000 people) in the March 2016 quarter, bringing this population up to 3,685,000. This was the largest quarterly growth since the series began in 1986. The largest growth was seen in the younger age groups (20 to 34 years old). 

Permanent and long-term migration figures showed a record net gain over the quarter. The net gain in migration figures was a result of more people arriving than departing. New Zealand citizens returning to live in New Zealand accounted for 20 percent of working-age migrant arrivals.

In the March 2016 quarter, the number of people employed increased 1.2 percent (28,000 people). The growth in employment this quarter exceeded the growth in the working-age population, which resulted in an increase in the employment rate of 0.2 percentage points, up to 65.1 percent. 

For the year, New Zealand’s employment growth was 2.0 percent (47,000 people). However, compared with a year ago, New Zealand’s employment rate is down 0.3 percentage points because there was more growth in the working-age population (up 2.5 percent).

Growth in employment rate driven by females in full-time jobs

The employment rate for women increased 0.4 percentage points, up to 60.0 percent, in the March 2016 quarter. The strongest growth in employment for women was in full-time employment, which was up by 10,600 people (1.4 percent). The increase in employment in part-time jobs was less strong, 0.7 percent, which is equivalent to 2,500 more people employed.

The employment rate for men increased 0.1 percentage points, up to 70.5 percent. The biggest growth for men was seen in part-time jobs, up 2.7 percent (4,000 people). There was an increase in full-time employment as well, up 0.7 percent (7,700 people).

Auckland has the strongest growth in employment

The following two sections refer to unadjusted figures.

Of the total growth in employment in New Zealand over the year to March 2016, 49 percent was in the Auckland region.

There was a significant increase of 23,400 more people employed (2.9 percent). Women in Auckland had employment growth of 4.1 percent over the year. This was twice as strong as the employment growth for men (2.0 percent).

The Bay of Plenty had a significant increase of 5.7 percent in people employed (7,900 people) over the year to March 2016.

The Wellington region had a non-significant increase of 3.0 percent in people employed over the year to March 2016 (7,900 people). 

Construction and professional services drive employment growth

The construction industry had a statistically significant increase of 17,500 more people employed over the year to March 2016, which was primarily in the Auckland region. In comparison, there were fewer than a thousand more people employed in Canterbury construction compared with a year ago.

The professional, scientific, technical, administrative, and support services industry had a statistically significant increase of 17,500 people more employed, an increase that was mainly in the Auckland and Wellington regions.

In the Quarterly Employment Survey (QES), which surveys businesses, the following industries had the largest increases in filled jobs for the year to March 2016:

  • construction (up 13,800 jobs, 9.6 percent)
  • health care and social assistance (up 11,300 jobs, 5.2 percent)
  • professional, scientific, technical, administrative, and support services (up 10,500 jobs, 4.2 percent).

Increase in unemployment

The seasonally adjusted number of people unemployed increased, with 10,000 more people in the March 2016 quarter (7.4 percent). The seasonally adjusted unemployment rate increased 0.3 percentage points, up to 5.7 percent, from a revised 5.4 percent last quarter (seasonal adjustment revised this figure).  

The increase in the number of people unemployed came from both women (up 9.6 percent) and men (up 5.2 percent) in the March 2016 quarter. The unemployment rate for females increased 0.4 percentage points (up to 6.2 percent), and the unemployment rate for males increased 0.2 percentage points (up to 5.2 percent).

The younger age groups (15–29-year-olds) had the highest increase in unemployment in the March 2016 quarter (up 12.1 percent), an increase of 8,400 unemployed people.

The Bay of Plenty region had a statistically significant decrease in the unadjusted unemployment rate – 2.7 percentage points over the year to March 2016. This brought the unemployment rate in this region down to 5.1 percent, making it the lowest rate in the North Island.

Unemployment rates by regional counil map - March 2016

New Zealand’s OECD rankings

With the unemployment rate at 5.7 percent, New Zealand is now 12th in the OECD rankings; down from 10th equal in the December 2015 quarter. This ranks New Zealand lower than the United States and the United Kingdom (with unemployment rates of 4.9 and 5.0 percent, respectively) but above Australia (5.8 percent).

More young men not in employment or education

The seasonally adjusted NEET (not in employment, education, or training) rate increased 1.4 percentage points, up to 12.4 percent, in the March 2016 quarter. This was the highest NEET rate since the March 2013 quarter, when it was 12.8 percent.

The increase in the NEET rate was mainly driven by men – up 2.3 percentage points, to 11.6 percent. This was the largest quarterly increase since the beginning of the series in 2004. The increase for men came mainly from the 15–19-year-old age group, whose NEET rate increased 3.2 percentage points, to 10.2 percent.

The seasonally adjusted NEET rate for women also increased over the quarter – up 0.5 percentage points, to 13.2 percent.

NB: the target population for NEET is relatively small, and therefore has a smaller sample size than some other groups. This data can have higher sample errors, which should be kept in mind when using these estimates.

Wage growth remains subdued

All the following movements are for the year to the March 2016 quarter.

The labour cost index (LCI) (including overtime) increased 1.6 percent. (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 2.9 percent. (This allows for quality changes within occupation as well as wage inflation). 

Average ordinary-time hourly earnings, from the Quarterly Employment Survey (QES), increased 2.4 percent, bringing it up to $29.47. (This measures the average hourly wage bill across all jobs in surveyed industries).

Private sector annual wage growth, as measured in the LCI, increased 1.8 percent, which is stronger than last quarter’s 1.6 percent.

Public sector annual wage growth increased 1.4 percent, after having 1.2 percent annual increases for seven of the last eight quarters. The latest annual growth in the public sector came from increases in central government (up 1.4 percent) and local government (up 1.5 percent). This is the largest annual increase for central government since the year to September 2013. The government increase includes wage settlements with the Police and several District Health Boards.

In the year to the March 2016 quarter, prices of goods and services bought by households, as measured by the consumer price index (CPI), increased 0.4 percent. The LCI (including overtime) increased 1.6 percent over the same period.  

Growth in weekly earnings down on previous quarters

The ordinary time average weekly earnings per FTE, as measured in the QES, increased 2.3 percent over the year to March 2016, up to $1,110.59. This growth was less strong than the 3.1 percent over the year to December 2015.

Annual mean increase in wages lowest since June 1994

Of all salary and ordinary time wage rates in the LCI sample, 57 percent rose in the year to the March 2016 quarter. Over the quarter, 13 percent of all salary and ordinary time wage rates increased – March quarters usually have the lowest proportion of quarterly increases.

Of the 57 percent that increased over the latest year, there was:

  • a mean increase of 2.9 percent (the lowest since the year to the June 1994 quarter, when it was also 2.9 percent)
  • a median (middle) increase of 2.2 percent (the lowest since the year to the June 2000 quarter).

Of the 13 percent that increased over the latest quarter, there was:

  • a mean increase of 2.9 percent
  • a median (middle) increase of 2.0 percent.

Wage growth in the construction industry

In the year to the March 2016 quarter, salary and wage rate growth (including overtime) in the Canterbury construction industry continued to ease, to 1.3 percent. This is the lowest annual increase since the series began in 2010.

For the rest of New Zealand, wage rate growth in the construction industry rose to 2.5 percent, the highest annual increase since the series began in 2010.

The annual mean increases of the rates that rose for the March 2016 quarter were:

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

The annual mean increases in Canterbury construction wage rates have been lower than the mean increases for the rest of New Zealand for the second quarter in a row.

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

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