Jobs squeeze hurting Auckland

Unemployment in the Auckland region is 7.3 per cent, ahead of 6.1 per cent elsewhere and above a 10-year trend of 5.4 per cent. Photo / Brett Phibbs

Auckland's economic recovery hindered by lack of employment growth - economist.

Unemployment is continuing to dog Auckland and hinder its economic recovery as employers express reluctance to take on new staff.

Geoff Cooper, Auckland Council's chief economist, found the region suffering 7.3 per cent unemployment, ahead of 6.1 per cent elsewhere and well above Auckland's 10-year trend of 5.4 per cent.

Aucklanders, dogged by rocketing house prices, earn only slightly more than people who live elsewhere - $1124 a week compared to $1021 a week. Youth unemployment is worse in Auckland than elsewhere: 28.6 per cent in the 15-19 year age bracket compared to 24.4 per cent elsewhere and 11.1 per cent in Auckland for the 20-24 year age group compared to 10.7 per cent elsewhere.

Cooper released his latest quarterly update on the health of the city yesterday and cited figures from the ANZ job ads series which dipped back into negative territory. Cooper found Auckland's labour market remained weak because firms are using up spare capacity within existing staff before they look to take on extra staff.

It's not that people are unwilling or unavailable to work, he found.

"Only 4 per cent of firms surveyed reported capacity as the main constraint to expanding output," Cooper said. There was simply not enough demand for goods and services produced by Auckland firms for many to be taking on staff, with 73.8 per cent reporting demand as the main constraint.

"Employment expanded by about 8000 jobs compared to the first quarter of last year, driven by increases in selected business services and health care and social assistance," Cooper said in his Auckland Economic Quarterly. "The absence of appreciable job growth hinders Auckland's recovery as unemployment, while down on last year's first quarter results, remains elevated compared to the 10-year average and was 7.3 per cent in the first quarter of this year."

Rents in Auckland were an average of $442 a week in this year's first quarter, compared to $324 a week elsewhere. Real median house sale prices in Auckland were $562,000 in the first quarter, compared to $400,000 nationally.

Tourism in Auckland is improving, with guest nights up 5.6 per cent in the city during the first quarter, below the 12 per cent rise elsewhere in New Zealand in the first quarter.

More new houses were being built, with 4764 consents lodged with the council in the year to March, down on the 10-year average of 6631 consents but up from the year earlier figure of 3976 consents. Cooper said: "This represents the early stages of a construction upswing in Auckland, which will need to continue before house prices ease."

Auckland update

7.3 per cent unemployment, compared to 10-year trend of 5.4 per cent.
$1124 earnings a week, compared to $1021 elsewhere.
$442 average rent a week, compared to $324 elsewhere.
$562,000 real median house sale price, compared to $400,000 nationally.

Source: Auckland Council