Job growth beats immigration

By BRIAN FALLOW

The labour market stayed strong in the March quarter, though the unemployment rate crept up to 5 per cent from 4.9 per cent in December.

Over the year to March the labour force grew by 24,000, or 1.2 per cent, most of which (15,000), was the result of strong net immigration, which included returning New Zealanders.

But jobs grew even faster, by 28,300, or 1.5 per cent, resulting in a drop of 5300 in the number of unemployed, Statistics New Zealand's household labour force survey found.

Full-time jobs grew even faster, at 33,000 or 2.3 per cent, while part-timers fell 5000 or 1.2 per cent.

The number of part-timers wanting to work more hours also fell, to 96,000 from 106,000 a year ago.

The long-term unemployed, defined as those out of work for more than six months, was 23,500, down from 27,000 a year ago.

But most of the annual improvements occurred last year. The latest quarter's results are essentially flat compared with the December quarter, according to Statistics New Zealand. The number of unemployed increased 1000 to 99,000.

"It appears unemployment may be flattening out and starting to oscillate around 5 per cent," Statistics New Zealand's John Morris said.

Bank of New Zealand economist Stephen Toplis said it was no surprise the market was so tight. It was entirely consistent with anecdotal evidence that firms continued to find labour scarce.

But the annual growth in unemployment, 1.5 per cent, is the lowest since June 2000. "We believe the trough in the unemployment rate is now behind us and see the rate creeping up to around 5.6 per cent by the end of the year."

The working age population - everybody over 15 - increased 2 per cent over the year to top 3 million. More than half the growth, 33,500 out of 61,700, was due to continued gains in permanent and long-term migration, Statistics New Zealand said.

The fact the labour force grew at a slower rate - 1.2 per cent - reflects the fact that a year after entering the country 45 per cent of migrants are likely to be in the labour force and 55 per cent not. But that is skewed by a relatively high proportion of students among migrants, who are counted as not in the labour force.