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Mixed Messages in Wellington Labour Market Data

Media Release
5 February 2009

Mixed Messages in Wellington Labour Market Data

While unemployment continues to rise, there are some bright spots for the Wellington labour market based on today’s statistical release and the Wellington Regional Chamber of Commerce’s recent survey of Wellington businesses.

Chamber CEO, Charles Finny said that while the labour market is easing, not all businesses are finding it easier to find staff.

“There is something of a ‘dual labour market’ occurring where staff shortages still remain in many areas particularly, in the services sector, while others are reducing staff numbers.

“Our just-completed survey of businesses showed increased numbers of Wellington employers are expecting to take on new staff in the coming months while there were also increased numbers expecting to reduce staff.

“In spite of the increasing unemployment, many businesses are still citing ‘staff shortages’ and ‘difficulty to recruit and retain’ as their key concerns.

“However, all in all, our survey showed a marked increase in the proportion of businesses finding staff easier to find than it was three months ago. It is also significant that 27% of respondents said that they were likely to reduce staff numbers in the coming moths. This is up from 23.8% three months ago,” said Mr Finny.

The Household Labour Force Survey, released today, shows that in spite of increased unemployment, many businesses are still taking on new staff with job numbers up 0.9% nationwide over the December quarter - a record high. However, while job numbers are up the total number of hours worked has fallen consistent with the slowing economy.

While not so accurate at the regional level, the survey shows job numbers in Wellington are also up, 9,600 or 3.6% over the year.

“Our assessment, backed up by today’s data, is that ‘labour hoarding’ is occurring. More people are being employed but are working fewer hours on average. This is partly because many employers want to try and hold on to staff through the downturn, in spite of less work, as they may be hard to find later,” said Mr Finny.

“All in all, though it will be a difficult road ahead for employers and we are pleased with the government’s recent announcements which will go someway toward relieving the pressure,” Mr Finny concluded.


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