Labour market weakens as appetite for hiring abates

Monday 4th May 2009

New Zealand’s labour market weakened in the first quarter as the prolonged recession prompted companies to trim workers, making jobs harder to come by.

The number of full-time equivalent jobs fell by 2% to 1.36 million in the first quarter, compared with the fourth quarter of 2008, seasonally, adjusted, according to Statistics New Zealand. Fill jobs dropped 2.6% to 1.72 million. Total paid hours declined 0.4% to 51.9 million.

Companies including Fisher & Paykel Appliances have eliminated positions as the first recession in a decade saps demand and forces companies to find cost savings. Today’s report comes before the Household Labour Force Survey on Thursday, which is expected to show the unemployment rate climbed to 5.4% in the first quarter, the highest since March 2003.

“The weakness of full-time equivalent employees and filled jobs over the year makes perfectly good sense with an economy that has been in recession over that entire period,” said Robin Clements, chief economist at UBS New Zealand. Volatility in the series, though, means the numbers have to be read with caution.

The Household Labour Force Survey “will provide the rationale for some further easing from the RBNZ in coming months,” probably two cuts of 25 basis points apiece to a low of 2% for the official cash rate, he said.

A New Zealand Institute of Economic Research survey last month showed 36% of firms expected to eliminate jobs, the biggest percentage since 1991. Some 42% of those companies surveyed said it has become easier to find skilled workers.

Average ordinary time hourly earnings in the private sector rose 1.1% in the latest quarter.

Full-time employment fell 1.7% in the March year, driven by the construction and manufacturing industries, Statistics New Zealand said. Part-time employment fell 1.8%.

Businesswire.co.nz

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