Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ Household Labour Force Survey (Q1 2001)

Data Flash (New Zealand)

Key Points

Employment was unchanged in Q1 following a revised increase of 1.0% qoq in Q4. The level of employment was 2.3% higher than a year earlier. This result was close to the median market expectation of +0.1% qoq.

Fulltime employment rose 0.8% to be 3.2% higher than a year earlier. Part-time employment decreased by 2.5% qoq to be 0.8% lower than a year earlier.

On an industry basis, strong growth was recorded in the manufacturing sector, rising 3.7% qoq. This was offset by lower employment levels in the business and financial services sector (partially reversing very strong growth in Q4). Sector data is volatile and should be treated with caution.

On a regional basis, strong employment growth was recorded in Gisborne-Hawkes Bay, the upper South Island and Southland. The unemployment rate in Southland was just 2.8% in Q1.

The number of total hours worked rose 2.8% after falling a revised 0.2% qoq in Q3, to be 5.5% stronger than a year earlier. The extreme volatility of this data means that quarterly data should be interpreted with caution. The unemployment rate fell to 5.4% (from 5.6% in Q4). This is the lowest unemployment rate since June 1988 when 5.2% was recorded. The participation rate decreased to 65.6%, from the 65.8% recorded in Q4 (the latter a 5-year high).

Market Reaction

The June bill contract sold off 4 ticks following the release of the data as the market assessed a lower likelihood of a 50bp easing on 16 May. We agree with the market's response.


Following two quarters of very strong growth, employment levels were broadly unchanged in Q1, a conclusion supported by yesterday's Quarterly Employment Survey (QES). Given strong employment growth in H2 2000 and below potential growth in GDP, some consolidation in employment levels was to be expected over H1 2001 as firms seek to boost productivity.

The strong hours worked result tends to suggest that Q1 GDP growth will be robust, consistent with our preliminary estimate of +0.8% qoq (up from 0.5% qoq in Q4). The hours worked data is very volatile and needs to be treated with caution. Yesterday's QES had suggested a small fall in hours paid. However, the QES series is not comprehensive and does not capture unpaid overtime by salaried workers. In addition, the NZIER's measure of capacity utilisation recorded a strong rise in Q1, more consistent with the HLFS result.

The labour market has continued to tighten. The fall in the unemployment rate to 5.4% is consistent with the further rise in surveyed measures of skill shortages and with the strengthening trend in wage growth reported in yesterday's QES and Labour Cost indexes.

As the charts above suggest, going forward labour market indicators remain quite positive.

The ANZ's job ads series has reported positive growth in each of the first three months of this year and remains at a historically high level. The April installment is due to be released tomorrow.

The QSBO measure of employment intentions remains consistent with positive levels of employment growth, as does the equivalent measure from the National Bank's Business Survey.

Looking ahead, as was the case with yesterday's QES, today's release supports the case for a 25bp cut in the OCR on 16 May, as the RBNZ seeks to balance the considerable risks of weaker than expected growth in global activity and stronger than expected inflation pressures. Thus we continue to hold the view that the RBNZ will very likely deliver a 25bp cut next week, a view shared by the majority of the market. But to the extent that a surprise is possible, we think that the possibility of no cut in rates (the decision taken by the RBA in early May) is at least as likely as the 50bps suggested by a minority of analysts.

Darren Gibbs, Senior Economist, New Zealand, (64) 9 351-1376

© Scoop Media

Business Headlines | Sci-Tech Headlines


Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>


Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>


Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>