KEY POINTS:
Labour shortages threaten to put the squeeze on construction and telecommunications companies.
A six-monthly survey of employers out today by recruitment firm Hudson shows 43.5 per cent of businesses expect to boost staff numbers in the first half of next year. Of 1700 employers surveyed, 7.8 per cent expected to reduce staff, while 48.7 expected no change.
Overall, employers in this survey expect to do more hiring than they did this time last year. The survey shows a positive net effect of 35.7 per cent, 1.7 per cent up on this time last year.
"Net effect" refers to the number of employers who expected to increase staff numbers, less the number of employers who expected to decrease staff numbers.
In the upper North Island, the employers in the construction and telecommunications expect to do the most hiring, with a 54 per cent net effect predicted for both sectors.
However economists said a tight job market meant there was unlikely to be enough labour to meet employers' demands for more staff.
BNZ economist Craig Ebert said very low unemployment meant there were not many more people to pull into the workforce.
"This may be a wish list, not a 'to do' list," he said of the employer predictions. "Where are these workers going to come from?"
Ebert said an increase in demand for labour would show up higher wages, rather than increased employment.
"We may see it show up in fierce competition for existing staff. Firms will be facing higher wage inflation, which they may not be able to sustain over the longer term."
Westpac economist Dominick Stephens said employer optimism reflected the strength of the economy, with high dairy prices filtering through to other areas.
Stephens said he expected to see a boom in infrastructure investment and non-residential construction next year, which would increase demand for construction workers.
"I'm not surprised the construction sector has strong intentions to hire," he said.
"What I'm not so sure about is their ability to actually find those people."
Stephens said the Queensland and West Australian construction and mining boom was sucking labour out of the New Zealand construction industry, as workers were lured away by high wages across the Tasman.
"Employers will have to be more flexible to meet the demands of employees, who essentially have it pretty good at the moment," he said.
"[Employees] will vote with their feet unless employers make things more attractive for workers."
A spokesperson for Telecom, Mark Watts, said the company was already managing shortages in the labour market and was confident it would continue to do so.
The company was looking to recruit 300 technicians as part of its broadband initiative.
Watts said Telecom was very aware of the the need to make job offers attractive enough to compete. "We've faced a squeeze for some time. In the current environment [labour shortages] are very much a fact of life for any big company, including Telecom."
Stephens said a lack of skilled workers was the single biggest thing limiting businesses at the moment. He expected the employment rate to drop as low as 3.3 per cent by the end of next year, from its current rate of 3.5 per cent making the shortage worse.
