Labour Market Showing Signs of Recovery

Labour Market Showing Signs of Recovery According to Hudson Employment Expectations Report

Auckland, New Zealand - Tuesday 18 January 2011 - The labour market is showing signs of recovery with one in four employers planning to increase their permanent staffing levels in the next quarter, according to the Hudson Report Employment Expectations Survey. This is up 4.6 percentage points from the previous quarter.

"This is the highest level of sentiment we've seen since mid-2008," said Marc Burrage, Executive General Manager, Hudson New Zealand.

"The improvement in sentiment shows that even though the New Zealand economy continues to remain subdued, the demand for staff is gradually picking up. Full time employment is up 1.8% over the past year, and unemployment has edged down from its late-2009 peak.

"Employers are rallying to ensure they have got the right teams on board to meet ambitious targets for the coming year."

The improvement in employment expectations has been consistent across the country, with all regions showing an increase in business confidence.

While the current mood is more positive, recent natural disasters have impacted employer sentiment. Hiring intentions in the South Island have risen solidly from the previous quarter (up 24.1%), driven largely by the construction industry rebuilding after the Canterbury earthquake. Meanwhile, the full measure that the Pike River disaster will have on business confidence is not yet known.

The majority of industries have shown a rise in sentiment compared to the previous quarter, although this varies across industries.

The IT industry remains the most confident across industries nationally, with a net 52.3% of employers intending to increase their permanent staff levels over the coming three months. There is a strong desire in this industry to shift away from heavy use of contractors as a normal part of business. More than a third (36.4%) of employers in telecommunications are planning to hire more permanent staff as the government's ultra-fast broadband initiative begins to be rolled-out.

Government employment expectations have increased this quarter after three consecutive declines, although this is usually as a result of restructures, certain replacement hiring when people leave, or changes in policy which require new skill sets. Employers continue to try and strike a balance between completing critical projects and meeting tightly controlled headcount caps.

The professional services, manufacturing and education industries have also shown quarterly increases in sentiment, while private healthcare and the financial services/insurance industry has shown a slight softening in hiring intentions. Hiring among banks slowed down after a hiring spurt in mid-2010. However, permanent staff members are likely to increase again in the June quarter as new budgets take effect.

Overall, there has been a slight softening in demand for contractors, with 14% of employers expecting to increase the size of their contracting workforce during the January - March period.

"What is clear from this quarter's report is that while the New Zealand economy continues to remain cautious, the labour market is nevertheless showing recovery," said Burrage.

"There is a greater sense of optimism, with employers continuing to grow in confidence and rebuilding their teams. Stronger economic growth is forecast from mid-2011 and we are likely to see demand for labour continue to increase, although this is likely to be gradual."

ENDS

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