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 Russel Norman Resignation

While not the decisive factor, last year’s election result must have made it easier for Greens Co-Leader Russel Norman to finally call it a day. After three years of solid campaigning on social justice, economic and environmental issues – and amidst another round of self-destruction by Labour, its ally and rival on the centre-left – the Greens had realistically expected to end up close to 15 % on election day. Instead, it barely held its own, and failed to increase its vote.

This would have been an especially bitter result for Norman. For the past six years, Norman has been the de facto leader of the Opposition – especially after Labour lost the plot with a series of inept leaders and a chronic identity crisis about what, if anything, it now stood for. More>>

 

Quick By-Election Expected: Mike Sabin Announces Resignation As Northland MP

Northland MP, Mike Sabin, today announced he has resigned from Parliament, effective immediately. Mr Sabin said he had decided to resign due to personal issues that were best dealt with outside Parliament. Mr Sabin will not be making any further comment. More>>

ALSO:

Gordon Campbell: On The Eleanor Catton Rumpus

If anyone was in doubt about the accuracy of the comments made in India by Eleanor Catton, the reaction from some quarters here at home has gone a long way to proving her point… More>>

ALSO:

More Rent Assistance, Less State-Owned Housing: John Key Speech - Next Steps In Social Housing

"We are going to ensure that more people get into social housing over the next three years, whether that is run by Housing New Zealand or a community provider. The social housing budget provides for around 62,000 income-related rent subsidies a year. We are committed to increasing that to around 65,000 subsidies by 2017/18, which will cost an extra $40 million a year." More>>

ALSO:

The Future Of Work: Andrew Little - State Of The Nation 2015

In 2005 when I led the EPMU we worked together with Air New Zealand to find a way to keep engineering jobs that were heading overseas. A lot of these workers were people I’d known for years and they were facing not just losing their jobs but not being able to find the kind of work they do without going overseas. A lot of people were facing personal and financial upheaval.... More>>

ALSO:

Gordon Campbell: On The Sabin Case, The Pressures On Greece And (Songs About) Coyotes

Mike Sabin is a National MP, and the current chairman of Parliament’s law and order committee. Yet reportedly, he is being investigated by the Police over an assault complaint... However, the PM will not comment on any aspect of the story. More>>

ALSO:

Houses, ISIS, King (& Catton): PM Post-Cabinet Press Conference

The Prime Minister met with reporters to discuss: • Social housing, the Auckland housing market • The prospect of joining international forces to combat ISIS • David Bain’s compensation • The lowering of the flag for the King of Saudi Arabia's death ... More>>

ALSO:

Gordon Campbell: On Tomorrow’s Speeches By John Key And Andrew Little

The Key government has already kicked off the political year on a stridently ideological note, with Environment Minister Nick Smith choosing to lay all manner of sins at the door of the RMA. Tomorrow, the government will wheeling out its best salesman – Prime Minister John Key – to sell its plans for state housing… . More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news