Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 


Employment rebounds, but all eyes on inflation

Employment rebounds, but all eyes on inflation

The Auckland economy is estimated to have grown 2.9 per cent year-on-year in the December quarter, taking growth through the year to 2.8 per cent. This is on par with the growth achieved through calendar 2012.

Three factors which will play a key role in determining the strength of employment and economic activity through 2014 will be net migration, consumer confidence and inflation, says Auckland Council’s Chief Economist, Geoff Cooper.

“Sustained high migration levels and a less cautious household sector could drive stronger spending and employment outcomes but, with inflationary pressures on the rise, this could well trigger a more aggressive interest rate tightening phase.”

The unemployment rate dropped to 6.3 per cent in the December quarter, the lowest quarterly result since the December quarter of 2008. “The rebound in employment was enough to offset a significant jump in the labour force – underpinned by rising participation levels and strong net migration figures,” says Mr Cooper.

Annual regional CPI inflation firmed to 1.5 per cent in the December quarter, having accelerated through the September quarter. Construction cost inflation has been the key contributor to the stronger headline result, with wage pressures still contained; but with the process of absorbing spare capacity now largely complete, and labour markets tightening, household inflationary expectations are on the rise.

Annual house price growth remains buoyant but sales volumes continue to decline. “The LVR limits have significantly constrained housing demand and their effect will be compounded by rising interest rates through 2014; however, demand is currently being bolstered by exceptionally high levels of net migration, which together with rising household incomes will help cushion house price growth.

“Net migration has the potential to boost housing activity in Auckland through 2014, but the major driver of construction cost inflation nationally is the Canterbury rebuild which continues to ramp up,” explains Mr Cooper.

Auckland’s economic growth has become increasingly broad-based: the upswing in housing construction is now having significant flow-on effects for other sectors in the economy, particularly manufacturing; consumer spending has gained momentum; and the external sector has been bolstered by strong visitor numbers and dairy prices and – to date – proved resilient in the face of a high NZ dollar and weakening Australian economy.

Excess capacity has now been largely absorbed and businesses have been taking on additional labour to cater for projected demand, but the outlook for employment growth is dependent on the strength of domestic activity – particularly housing activity and consumer spending – going forward.

“On balance, the outlook is for solid employment growth and a further decline in the unemployment rate through 2014 back towards 5.0 per cent. However, there are plenty of upside and downside risks to this outlook – both domestic and external”.

To view the latest Auckland Economic Quarterly, or archive editions, visit aucklandcouncil.govt.nz/chiefeconomist [latest edition available online from 11.00am Thursday 10 April].

Ends.


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell:
On The Last Rites For The TPP

The Trans Pacific Partnership trade deal is one of those litmus issues that has always had more to do with one’s place on the political spectrum than with any imminent reality.

To date, the Greens have opposed (a) a wide range of the leaked content of the TPP (b) the secretive way it has been negotiated and (c) the undemocratic way in which any final document would be ratified. Labour has shared some of those concerns, but while remaining generally supportive of the deal itself.

National has, for its part, been very enthusiastic about the TPP, while still giving assurances about Pharmac being protected... For the TPP’s friends and foes alike though, the end now seems nigh. More>>

 
 

Gordon Campbell: On The Farcical Elevation Of David Seymour

With the election won, it’s time to find jobs for the boy. David Seymour is the Act Party’s latest scrounger to be rewarded by the National Party, and not only with a seat in Parliament. More>>

ALSO:

As Key Mulls Joining ISIS Fighting: McCully Speech To UN Backs Security Council Bid

It is an honour to address you today on behalf of the Prime Minister and Government of New Zealand. Our General Election took place last week - our Prime Minister Rt Hon John Key is engaged in forming a government and that is why he is unable to be here in New York... More>>

ALSO:

Labour: Cunliffe Triggers Party Wide Leadership Contest

David Cunliffe has resigned as Labour Leader, but says he will seek re-election... If there is any contest the election will have to go through a process involving the party membership and union affiliates. More>>

ALSO:

Flyover Appeal: Progress And Certainty, Or Confusion And More Delays?

Lindsay Shelton: The Transport Agency, embarrassed by the rejection of its flyover alongside the Basin Reserve, says it’s appealing because the decision could “constrain progress.” Yet for most clear-sighted Wellingtonians a 300-metre-long concrete structure above Kent and Cambridge Terraces would in no way be seen as progress… More>>

ALSO:

Gordon Campbell: On Cunliffe’s Last Stand

Right now, embattled Labour leader David Cunliffe has three options. None of them are particularly attractive for him personally, or for the Labour Party... More>>

ALSO:

Key Seeking 'New Ideas': Look To Children’s Commissioner On Poverty - Greens

John Key should not reinvent the wheel when it comes to ideas for tackling child poverty, and instead look to the recommendations of the Children’s Commissioner’s Expert Group on Child Poverty, Green Party co-leader Metiria Turei says. More>>

ALSO:

'Safe To Re-Enter' - OIA Docs: Safety Is Absolute Priority At Pike River Mine

“We understand that the time it is taking to complete our evaluation of the risks is frustrating for the family members and we are trying to complete this work as quickly as we can,” Ms Dunphy says. “It is Solid Energy’s responsibility to make this decision and we will do so, once we have all the information required to make a fully-informed decision.” More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news