Decrease in job ads points to slowing economy

By BRIAN FALLOW

Labour market and manufacturing data out yesterday add to the picture of a slowing economy.

Job advertising, tracked by ANZ Bank, fell 3.6 per cent last month, seasonally adjusted. The level of advertising is now 6.1 per cent down on a year ago and 13.9 per cent off its peak in July 2001.

Auckland job ads fell 4.8 per cent last month, wiping out April's 3.5 per cent rise. They are 2.5 per cent down on a year ago.

Waikato job ads have plummeted since last September to their lowest level in five years. They fell a further 2.9 per cent last month to a level 20.3 per cent down on a year ago.

ANZ chief economist David Drage said the job ad declines recorded in three of the first five months of this year reflected slower economic growth.

"While the overall level of job ads remains consistent with a relatively solid labour market, employment growth in 2003 is likely to be slower than that seen over the past couple of years," he said.

The continued strength of immigration might have eased some of the pressure on the labour market and reduced the need for employers to readvertise positions.

"Nevertheless, it is unlikely an increase in labour supply alone has accounted for all of the recent weakness in job advertising, particularly in light of what we already know about the current economic climate," said Drage.

Further evidence of decaying momentum came from Statistics New Zealand's quarterly survey of manufacturing, which found manufacturers' sales contracted 2 per cent in the March quarter when adjusted for inflation and seasonal effects.

The slowdown was widespread and nine of the 15 industrial sectors recorded falls.

Stocks of finished products rose by $2 billion, to be 40 per cent higher than a year earlier.

Bank of New Zealand economist Craig Ebert said meat and dairy processing stocks in particular were nearly three times higher than a year ago.

That corroborated the view that agricultural production was strong in the March quarter but that it went into inventories instead of being sold straight away.