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Auckland Unemployment

As a follow up to yesterday's economic forum, please find below an analysis from Geoff Cooper on employment/unemployment statistics for Auckland, including some important information on how these statistics are derived and should be interpreted. I trust you find this useful. Analysis from Geoff Cooper I think it is important to understand the recent HLFS figures in greater context. Aucklands unemployment rate in the September 2012 quarter was 8.6%, which is a jump of 1.3 percentage points over the June quarter (not seasonally adjusted) and 1.8 percentage points higher than the same quarter of the previous year. To answer your question, yes this is a significant jump in the rate. It equates to a loss of approximately 16,600 jobs over the September quarter. There is little doubt that the unemployment rates released last week were higher than the markets and forecasters were predicting.The table below shows that 20-24 year olds experienced are large increase in unemployment. Category Rate for September 2012 Quarter 8.6% 30.5% Change from last quarter (not seasonally adjusted) Was 7.3%, up 1.3 percentage points Was 31.0%, down 0.5 percentage points Was 10.8%, up 4.1 percentage points Change from same Average of last quarter of last 4-quarters year Was 6.8%, up 1.8 percentage points Was 24.1%, up 6.4 percentage points 7.6% 29.2%

Total (Auckland) 15-19 (Auckland)

20-24 (Auckland)


Was 13.9%, up 1 percentage point.


Unemployment in Auckland In Auckland, employment expanded in four out of 12 sectors (agriculture and mining; accommodation and food services; health care and social assistance; other services). Itcontracted in the remaining 8. The sectors which lost the greatest number of jobs over the September quarter were: wholesale and retail (down 5,500, mostly full time workers); and education and training (down 6,000 people, mostly part time workers). Why the HLFS should be treated with caution Many economic commentators are slightly dismissive of the HLFS survey results due to other employment indicators suggesting a different story: Here are some reasons why the situation in Auckland is not as dire as the unemployment numbers might suggest: In the retail sector, electronic card transactions have been on par with last quarter (both by value and number) suggesting that sales have not seen a large drop (that might generate a shift in employment of this scale). NZIERs Quarterly Survey of Business Opinion shows businesses have become more optimistic in the September quarter than the previous quarter the net percentage

of Auckland firms that believe the general business situation will improve over the next six months rose from 5.2% to 12.12% A higher net percentage of Auckland firms expect to increase the size of their workforces over the next 3 months, increasing from 4.14% to 8.38%. The Westpac McDermott Miller employment confidence survey has not changed between the last two quarters NZ level data suggests consumer confidence is up slightly and on balance, the number of optimistic households outnumber the number of pessimistic households. Notwithstanding this, households are finding the job market difficult, with a net 63% of NZ households say that jobs are hard to get. The Quarterly Employment Survey (also collated by Statistics NZ) is a measure of demand for labour by firms and shows that the full time equivalents employed by Auckland businesses in the September 2012 quarter was on par with the previous quarter and up slightly over the previous year The QES also shows that the total number of work hours in the Auckland economy increased slightly over the last quarter. One interpretation could be that people are moving from part-time employment to full-time employment. We have seen an upswing in the number of residential building consents issued in Auckland which should help to boost employment in the construction sector

The situation in the rest of NZ is different At a NZ level, the changes in employment demographics are different to Auckland. The main quarter-on-quarter changes for New Zealand in unemployment were in the professional, scientific, technical, administrative and support services (down 9,900 people); transport (down 6,800 people); manufacturing (down 6,100 people); education and training (down 5,900 people); and construction (down 4,700 people) despite a big increase in Canterbury. Education and training The point of similarity between Auckland and NZ employment data has been in the education and training sector. While there is likely to be a seasonal element to employment in the education and training sector, comparing the results for the September quarter this year to last year, there is still a loss in the number of people in employed in this sector of about 5,900 people in Auckland and 9,900 for NZ. There has been some weakening in international student numbers to NZ. Figures for the number of permanent, long term migrants entering NZ on a student visa in 2012 (year to September) have fallen in the last three years which could explain some of the weakening in employment in this sector. Australia and China stalling The Australian and Chinese economies have slowed somewhat over the last quarter and this may have some downstream effects for New Zealand. First, softening demand from our largest trading partner; and second, unemployment in Australia increased 0.3 percentage points over the last few months. China also continues to experience a slowing rate of growth down from near 10% in 2011 to 7.4% currently.

Harvey Brookes Manager Economic Development Phone: +64 9 307 6034 / Extn (40)7834 / Mobile +64 21 913 418 / Fax +64 9 3695484 Auckland Council, Level 4, 360 Queen St, Auckland Central. Private Bag 92300, Auckland 1142. Visit our website: