Hudson Report Points To Improved Market Certainty

Media Release


Hudson Employment Expectations Report Points To Improved Market Certainty

New Zealand businesses remain positive about employment intentions, led by jumps in confidence in the IT sector and the South Island.


Auckland, New Zealand – Monday 12 July 2010 – New Zealand employment confidence has increased for the fifth quarter in a row, but is up only marginally on figures from the first half of 2010, as businesses take cautious steps towards gearing up for future opportunities.

The overall results of the Hudson Report: Employment Expectations Survey show a net 20.3% of businesses indicating an intention to increase their permanent headcount during the July – September 2010 period, up 0.5 percent points (pp) from the previous quarter.

“The consistently positive hiring intentions of the last three surveys indicate that the market has reached a new equilibrium, after the turmoil of 2009,” said Marc Burrage, Executive General Manager, Hudson New Zealand.

“Although this positive sentiment does not match the levels enjoyed during the boom, it suggests that businesses are feeling more certain about the future.”

Strong employer intentions to increase the size of their contracting/temporary workforce (an increase of 6.9pp to a net 13.2%), reiterates the fact that businesses are taking a very cautious approach to investment and looking for staffing solutions that allow them to scale up and, if necessary, down again quickly.

“Historically an increase in contracting/temporary employment confidence has been an early indicator of improving economic conditions. Up until this report, the recovery from the recent recession had trended differently, with intentions to increase permanent employees improving ahead of intentions to employ contractors. This suggested that the back-filling of critical permanent roles that had not been filled during the downturn was taking precedence,” said Burrage.

“The latest results should provide confidence to the increasing number of skilled professionals that have made the decision to be career contractors in recent years.”

The majority of industries surveyed for the July – September 2010 quarter have recorded an increase in sentiment over the past quarter, but there are some exceptions leading to the steady overall result. The IT sector leads the positive sentiment with well over half (net 55.7%) of employers indicating plans to raise their permanent staff numbers during the coming three months – a 29.2pp increase.

“The sharp sentiment improvement in the IT industry is one of the clearest indicators that businesses are ramping up many of the projects that were put on hold recently, signing off the large-scale capital expenditure required for IT projects and back-filling vacant roles.”

Other sectors to enjoy significant increases are private healthcare and FMCG, up 21.5pp and 16.8pp respectively. Confidence in the financial services/insurance sector is also of note, with a fifth consecutive quarter of improvement and construction/engineering/property has continued to improve after a significant jump in the second quarter of 2010.

National Permanent Employment Expectations by Region

While the upper North Island and lower North Island regions experienced declines of 1.0pp and 2.4pp respectively in employer sentiment, the South Island has continued to buck the trend and outperform the northern regions for a third quarter in the row. Q3 2010 is the fifth consecutive quarter in which sentiment has improved in the South Island, rising 8.4pp to 34.5%. The overall sentiment in the South is now over 18pp more positive than the upper North Island and lower North Island.

“This is the first time that the South Island has enjoyed a sustained period where employer sentiment has outperformed the rest of the country since the Hudson Report began in 2000,” said Burrage.

This sentiment is being led by financial service/insurance which is up 42.2pp to 53.3% positive sentiment and all other sectors, except telecommunications and transport have recorded an improved sentiment in the South Island for July – September.

In the upper North Island, the overall sentiment has been impacted by drops in employer confidence in education, manufacturing and telecommunications. Gains in IT, FMCG and private healthcare have offset the overall result, with the region recording a net 16.6% sentiment. Reductions in government, telecommunications and healthcare employer confidence has impacted sentiment in the lower North Island, with the overall sentiment at 16.9%.

“Overall the July-September Hudson Report offers a strong indication that New Zealand is well on the path to economic recovery. Especially when it is considered alongside some of the other key economic indicators – most notably the Reserve Bank taking steps to remove the economic stimulus package by increasing the Official Cash Rate,” said Burrage.

“The fact that there are still fluctuations in some sectors backs the notion that it is going to be a somewhat bumpy ride towards this recovery – regionally and from sector to sector. While overall employers are wise to be cautious, they also need to consider whether they are happy for their businesses to rise with the tide or want to grow ahead of the market. Competition for skills in key sectors, for example IT, will ramp up quickly as vacant roles are back-filled and employers wanting to secure the best people need to act now.

“Those employers that put significant emphasis now on forward-looking recruitment strategies will be best placed to deliver on growth opportunities and increase their competitiveness as market conditions continue to improve.

“Employers that are short-sighted will struggle when high demand and short supply for critical skill-sets return.”

- ENDS -

Editor Note
Please contact us for more information and print-ready graphs or to arrange an interview.

The Hudson Report
The Hudson Report is an established and highly reputable publication, based on in-depth and nationwide research. Released quarterly, the report uncovers and analyses the hiring expectations of New Zealand employers over the forthcoming quarter and provides insights into a range of human resource issues currently impacting business and the broader New Zealand economy.

In its ninth year of quarterly publication, the Hudson Report combines robust data on employment expectations with economic commentary and extensive market insights gleaned from Hudson’s conversations with employers nationwide. Hudson Report: HR Insights is used by employers throughout New Zealand to stay abreast of contemporary human resources issues and best practice. Hudson Report: Employment Expectations is a leading economic indicator and a trusted source of information on issues and trends affecting the New Zealand labour market. It is used by the wider business community to assist in long-term strategic planning.

Results for this issue of the Hudson Report were gathered through interviews with 1,163 employers across New Zealand, conducted by Hudson recruitment, talent management and managed services professionals.

ends

© Scoop Media