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Strong growth & labour market conditions to remain

8 December 2002 Media Statement

Strong growth & labour market conditions to remain - report

The strength of the New Zealand economy has translated into a large improvement in overall labour market conditions, a report released today by Social Services and Employment Minister Steve Maharey finds.

The Department of Labour report, the Labour Market Outlook – December 2002, which looks at New Zealand’s overall labour market conditions for the year to September 2002 and the outlook to March 2004, says that labour market conditions should remain strong and employment prospects are expected to remain steady for the next year to 18 months.

It forecast of a solid two-and-a-half to three percent growth in the economy over the next 18 months is in line with its prediction of steady conditions for the labour market over that period. The Department of Labour also expects the unemployment rate to remain between five and five-and-a-half percent in the next 18 months.

Steve Maharey said the report shows more people have been attracted into the New Zealand labour force during the past year, with the labour force rising by three percent (or 58,000 people) over the year to September 2002, an overall labour force participation rate of 66.6 percent.

“Over the past year employment rose by 2.7 percent (or 50,000 people) over the year, with high growth in late 2001 and early 2002 and moderate growth in the June and September 2002 quarters.

“The annual rise was concentrated in full-time work, which increased by three point one percent (43,000), while part-time work increased by one point nine percent (8,000), the report shows.

“Most of the 50,000 increase in employment over the year to September 2002 had occurred in hospitality, property and business services, construction, health and community services and education.

“New Zealand’s buoyant local economy had encouraged businesses to take on more staff, resulting in job growth of nearly three percent in the year to September,” Steve Maharey said.
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Steve Maharey said the results are a positive outlook for the labour market, based on relatively good prospects for the New Zealand economy overall. Although the report forecasts an expansion for total employment, shortages of skilled staff would constrain job growth for some firms.

“The government is tackling head-on staff shortages, particularly shortages of skilled staff, which the report identified as being of some concern.

“Some level of skills shortage is a natural consequence of a dynamic, healthy economy but this government wants to make sure skill shortages don’t reduce the country’s productive capacity.

“However, government initiatives announced in this years Budget such as the Skills Action Plan, designed to speed up the matching of people’s skills to the job opportunities currently available and reduce skill shortages by helping people to make better decisions about education and training, are directly addressing skill shortages.

“In the past fortnight the government has launched an electronic information portal, WorkSite, to provide seamless access to labour market information from a single website (, and a new on-line publication, workINSIGHT, providing an alternative way to access current and new labour market information”, Steve Maharey said.


Labour Market Outlook – December 2002 can be accessed online at:

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