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NZ businesses losing confidence in face of worker shortage, EMA survey shows

Wednesday 6th December 2017

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Businesses are heading into 2018 with less confidence than in 2017 and the tight labour market is the number one headache for employers, a survey by the Employers and Manufacturers Association has found.

Businesses expecting conditions to improve has dropped to 24 percent from 47 percent in the prior survey, and those expecting conditions to worsen increased to 28 percent from 4 percent over the same period.  However, the number expecting conditions to stay the same has remained relatively steady at 48 percent compared with 47 percent in the prior survey. The annual EMA survey was conducted from Oct. 31 to Nov. 13 and there were 421 respondents. 

It reflects sentiment seen in other surveys are respondents are concerned about changing government policy under the new government and a softer housing market, among other factors. Last week's ANZ Business Outlook survey showed a net 39 percent of businesses were pessimistic about the year ahead, the lowest level since early 2009, and a decline of 29 points from the previous month. 

The tight labour market remains a key issue for employers in the EMA survey, with 72 percent saying it is difficult or very difficult to recruit staff in skilled position, unchanged from the prior survey. A total of 65 percent say there is - or soon will be - a skill shortage in their industry sector. Of respondents, 53 percent had increased their number of employees over the year, while 47 percent had not. 

There has been an increase in the number of employers who seek skilled migrants to 23 percent in 2017 from 21 percent in 2016. Overall, 49 percent were using the immigration process to recruit staff, compared to 38 percent in 2016. 43 percent rated the process of using immigration as difficult to very difficult. 

New Zealand has been experiencing record levels of net migration with annual net migration rising to 70,700 in the year to October, from 70,300 in the same period a year earlier. This pool of potential employees may be curbed as the new Labour government looks to cut it by 20,000 to 30,000 people in order alleviate pressure on infrastructure and housing. 

In survey comments, employers called on the government to "speed up the renewal and initial application process" and asked for "less restrictions in regards to proving that the position was not able to be filled by a New Zealander."

"We look forward to seeing the public policy response from the new coalition government in regards to these matters," EMA chief executive Kim Campbell said. 


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