Labour market

Updated: 9 February 2010

Weakness in construction sector employment continued, in line with the sustained decline in the overall labour market.

According to the Quarterly Household Labour Force Survey (HLFS), the overall unemployment rate increased for the eighth consecutive quarter and jumped from 6.5 percent in the September 2009 quarter to 7.3 percent in the December 2009 quarter, to be 2.6 percentage points higher than December 2008. Employment in the construction industry grew by 3.1 percent in the December quarter, recovering part of the 7.9 percent decline between June 2009 and September 2009.  In the year to December 2009, employment was 3.5 percent lower, which follows a 2.4 percent decline between 2008 and 2007. In the December 2009 quarter, the survey recorded a total of 177,300 people employed in construction.

Weakness continues in the number of paid hours worked in construction as reported by the Quarterly Employment Survey (QES). Hours worked fell for the sixth consecutive quarter in December 2009, falling by 14.4 percent compared with December 2008, larger than the 1.7 percent decline in hours worked across all industries over the same period. The number of construction hours worked in the December 2009 quarter fell to 3.6 million from 4.2 million hours the same time the previous year. This follows a 6.2 percent decline between the September quarters in 2009 and 2008.

Figure 3: Number of People Employed in the Construction Industry (to December 2009)

 

^{_{Source: Statistics New Zealand, HLFS}}

The number of people leaving New Zealand who are employed in construction and building-related trades had been slowing in recent months. In the year to September 2009, there was a net outflow of 190 building and construction workers, 78.2 percent less than the net outflow of 870 workers in the year to September 2008.

From October 2009, Statistics New Zealand adopted the Australian and New Zealand Standard Classification of Occupations (ANZSCO) for classifying the occupations of permanent and long-term migrants.[1]As a result, the group of occupations that are aggregated to form an industry total for the construction sector has changed and the data series using the old classification has been discontinued, so that currently there is only data available from October 2009.[2]

In January 2010, there were 361 construction-related workers arriving in New Zealand, and 297 workers departing permanently, resulting in a net inflow of 64 which is 63.8 percent lower than the net inflow of 177 workers in December 2009.  This follows a 11.5 percent decline between December 2009 and November 2009 and a 25 percent increase between November 2009 and October 2009 when there was a net inflow of 160 workers.

While recent data had shown signs of stabilisation in hours worked and numbers employed in construction, the surprisingly large decline in the overall labour market for the December quarter indicates that the economy and the construction sector remain vulnerable. While it is difficult to draw conclusions from three months of migration data (and thereby preventing year-over-year comparisons), it would seem that the continuing trend of fewer construction workers leaving New Zealand lends support to expectations of a pick-up in activity in early 2010, consistent with improvements in construction confidence according to survey data, and the cooling of the housing market in Australia.

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