Construction boom to drive growth in NZ jobs MBIE says

Photo / Nick Reed

New Zealand's construction boom is expected to be the single biggest driver of employment growth over the next three years, generating about 29 per cent of a forecast 183,900 jobs to be created by March 2019, government figures show.

The Ministry of Business, Innovation and Employment's "Short-term Employment Forecast: 2016-19" report uses the Treasury's GDP growth forecasts for the next three years to estimate how many jobs will be created and where. Finance Minister Bill English releases the Half Year Fiscal and Economic Update tomorrow.

The Budget in May projected average annual economic growth of 2.8 per cent over the five years to June 2020. MBIE said using NZIER survey figures, its short-term employment model has annual growth averaging 3.4 per cent in the next three March years.

Construction activity would remain a "major boost" to employment in the short-term even though Canterbury rebuild activity had levelled out.

"Building and construction activity is forecast to be driven mainly by Auckland residential construction over the next three years and reconstruction and rebuilding activities of key infrastructure in the Northern Canterbury and Wellington regions," the department said in its report. "The pipeline of residential, commercial and government work remains solid."

MBIE forecasts the unemployment rate to fall to 4.2 per cent by March 2019. It was at 4.9 pe rcent at the end of the third quarter.

It estimates 53,700 more construction and utility jobs will be added by March 2019. Of those, 20,500 are being created in the year ending next March, its forecasts show. That's twice the number as for the next two biggest sectors - business services and health and education, at 10,800 and 11,200 respectively. By March 2019, 30,800 business services jobs would be created and 28,300 health and education jobs.

"Over the forecast period, employment growth in the construction and utilities sector is likely to increase demand for professionals, technicians and trade workers and labourers across the country," MBIE said. "Growth in construction activities will support employment in regions experiencing growth in residential investment, particularly in the Auckland region."

It said strong growth in business services is expected to drive demand for highly skilled workers in urban regions such as Auckland and Wellington. A growing population and rising demand for childcare and the elder care would drive growth in health and education jobs mainly in urban centres, including Waikato and the Bay of Plenty.

Tourism is expected to add 10,600 jobs in the hospitality sector in the next three years, it said.

The report says 53,200 of the jobs forecast to be created over the next three years, or about 29 percent, would be for lower-skilled workers, while their share of overall jobs would shrink to 44 percent from 46 percent. The ratio of highly skilled jobs to overall employment is expected to edge up to 43 percent from 42 percent, with an extra 101,000 of those jobs projected.