A new type of downturn

MEDIA RELEASE
5 February 2009
A new type of downturn

Today’s Household Labour Force Survey (HLFS) release shows New Zealand’s labour market is adjusting well to the global recession, says Labour Department Head of Labour Market Information Monique Dawson.

“The recession has caused the demand for labour to fall – we can see that the number of hours actually worked has fallen - but this has been managed by increased part-time work rather than a large increase in unemployment,” says Ms Dawson.

“While unemployment rose from 4.2% in the September quarter to 4.6% in the December quarter, there is more part-time employment for both men and women.”

“This labour market adjustment is exactly what you would hope to see from a functional labour market during a downturn – managing reduced demand while keeping people in employment.”

Ms Dawson says while New Zealanders work some of the longest hours in the OECD, a trend toward reduced hours has been apparent in recent data. This has continued in the December-quarter results.

“Unlike previous downturns, we entered this one from record low levels of unemployment, giving the labour market more flexibility,” says Ms Dawson. “We are not faced with large stocks of unemployed, and there remain skill shortages across the labour market.”

“While there are clearly going to be difficult times ahead for New Zealanders, the dynamism in the labour market will help keep people employed and dampen unemployment growth.”

ENDS

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