Employment Growth Figure Lags Badly

Media Release
9 June 2008

NZ Businesses’ Employment Growth Figure Lags Badly Against Other Countries

New Zealand’s privately-owned businesses are lagging behind most other countries in their employment rate.

The latest international survey by accounting and business advisory firm Grant Thornton shows employment among privately-held businesses in New Zealand has risen only 1% in the past year, making it a cellar-dweller along with Ireland, France (both also on 1%), Italy (zero growth) and Thailand (minus 4%).

In comparison, Australia’s employment growth figure moved up to 6% from the previous year’s 4%.

A year ago the New Zealand employment growth figure from the Grant Thornton International Business Report survey was not far behind Australia at 3%.

“This is not good news for New Zealand,” said Grant Thornton New Zealand spokesman Peter Sherwin. “The best that might be said for it is that the employment market has been tight. But that is because there has been a shortage of skilled staff in New Zealand – and one of the reasons for that is that many potential employees have gone to Australia.

“Regrettably, a lot of these people would have been valuable employees and many of them will probably not return,” he said.

“The end result of 1% employment growth is a negative economic effect. Privately-held businesses comprise the majority of companies in New Zealand by far and, regardless of their output compared with corporates, they are collectively a large force of employers who provide a ripple effect in the economy, particularly in terms of confidence and retention of New Zealanders.

“Clearly there is a challenge for whatever Government is in power by the end of this year to produce a package that will inspire New Zealanders to stay and advance the economy.”

The survey showed double-digit employment growth in Vietnam (14%), India and mainland China (both 12%), and Armenia (11% - down from its chart-topping 13% the previous year).

Other countries to perform well were Brazil (9%), Argentina and Singapore (both 8%), Turkey (7%) and a group including Australia and South Africa on 6%.

“With the odd exception of Thailand, New Zealand has been well outperformed by other countries in the southern hemisphere,” said Mr Sherwin.

ENDS

About the IBR
The International Business Report surveyed more than 7,500 owners of medium sized businesses in 34 countries. In New Zealand, Consumer Link surveyed 150 businesses. For the purposes of the IBR survey, a medium-sized business in New Zealand was seen as employing between 10 and 149 people. The research was conducted by Experian Business Strategies Limited and Harris Interactive. All figures were correct at time of going to press. To find out more about IBR and to obtain details of IBR reports and results please visit www.internationalbusinessreport.com.

About Grant Thornton International
Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms providing assurance, tax and specialist business advice to privately held businesses and public interest entities. The strength of each local firm is reflected in the quality of the international organisation. All Grant Thornton International member firms share a commitment to providing the same high quality service to their clients wherever they choose to do business.

About Grant Thornton in New Zealand
In New Zealand, Grant Thornton has independent firms in Auckland, Christchurch, Dunedin and Wellington. From market-leading services for the owners of private
businesses, to audit, to insolvency and capital markets services for corporations, and to innovative taxation and wealth management services for individuals, Grant Thornton in New Zealand helps business owners achieve success and realise their ambitions.

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