Employment annual growth has fallen from the dizzy heights of 60,000 to 80,000 per annum we had in 2013 and 2014. The last two quarters’ data sees employment growth flattening at about 33,000 per year.
This is around about the net natural increase of our population, which is the increase before we take account of migration.
For employment growth there is really only one game in town now, and that is construction and support industries like rental and hiring. These two combined increased employment by 31,000 people in the last year.
The big losers have been the industries dependent on tourism and personal services. Taking accommodation, hospitality, arts and recreation services, transport, retail and personal services together, this group lost employment of over 11,000 people over calendar 2015.
This has been a really rapid drop-off in employment growth and probably the best we can foresee is annual growth continuing in the low 30,000s range. And that is probably being optimistic.
Labour force figures concerning
Large changes in behaviour are also appearing in the labour force numbers. The main change is that a very large number of people have withdrawn from the labour force. In calendar 2015, the number of working aged people not in the labour force increased by 59,500. To be not in the labour force a person has to be 15 years or over and be neither employed, nor officially unemployed according to international definitions. The increase of those not in the labour force were made up of just 3,500 more people studying, 31,500 more people retired, and a further 25,000 people “staying at home”.
The number of people not in the labour force can be quite volatile as people change their labour force status, but this figure of 59,500 is an historical high in this series, and certainly lends weight to the employment indication that parts of the economy are slowing down.
Especially as not all of this change can be put down to retirements. It may well also impact on social services and social welfare expenditure.
Migration and studying figures confusing
The data shows a very moderate increase by 3,500 in the number of people of working age, who are studying. However, we know that there has been a considerable increase in immigration of people (especially from India) to study in New Zealand.
The immigration net inflow of people aged 15 years plus (i.e. of Working Age) was close to zero in 2012, remembering that included the net emigration following the Christchurch earthquakes. This grew to a positive 45,000 in calendar 2014 and reached about 57,000 in calendar 2015. This large increase in the number of people 15 years and over entering New Zealand MAY be largely due to increased numbers of international students arriving in some guise or another. The puzzle is that their numbers do not show up in those said to be studying, but rather the large corresponding increase appears to show up in those “staying at home”, or retired.
This perplexing conundrum illustrates that the story of a soundly-based growing economy generating more jobs is becoming increasingly less convincing.