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Labour Market Statistics: December 2016 quarter
Embargoed until 10:45am  –  01 February 2017
Commentary

Labour force participation continues to grow

In the December 2016 quarter, the seasonally adjusted labour force participation rate rose to 70.5 percent, up by 0.4 percentage points from the September 2016 quarter. The number of people participating in the labour force, at 2,649,000, increased by 1.1 percent (up 29,000 people) in the December 2016 quarter, with both men and women contributing to this.

The labour force comprises all those in the working-age population who were either employed or officially unemployed. Over the quarter, more people were employed and unemployed.

Labour market summary; seasonally adjusted; December 2016 quarter

In the same period, the seasonally adjusted number of people not participating in the labour force fell by 12,000 people (down 1.0 percent). The fall came predominately from women, down 11,000 (down 1.6 percent); the number of men not participating fell by 1,000 (down 0.2 percent).

Employment growth remains strong

The seasonally adjusted working-age population was up 0.5 percent (up 17,000 people) in the December 2016 quarter, to reach 3,755,000.

In this quarter, seasonally adjusted employment increased 0.8 percent, with 19,000 more people employed than in the September 2016 quarter. This is the fifth consecutive quarter where growth in employment has exceeded growth in the working-age population. This has resulted in the employment rate rising to 66.9 percent, up 0.2 percentage points from the September 2016 quarter.

 

Seasonally adjusted employment rose for both men and women over the December 2016 quarter. The number of employed women was up 1.0 percent (up 11,000); for men the increase was 0.6 percent (up 8,000) over the quarter.

The number of seasonally adjusted filled jobs reported by businesses from the Quarterly Employment Survey (QES) increased 1.2 percent over the December 2016 quarter, and 3.3 percent over the year – the largest annual increase since the March 2015 quarter, when it was 3.3 percent.

Unemployment rate rises to 5.2 percent

The seasonally adjusted number of people unemployed increased by 10,000 in the December 2016 quarter. This means there were more people available to work, and who had either actively sought work or had a new job to start within the next four weeks. The seasonally adjusted unemployment rate rose by 0.3 percentage points to 5.2 percent in the December 2016 quarter.

In the year to the December 2016 quarter, the number of unemployed people increased by 15,000; the unemployment rate was 4.9 percent a year ago.

The seasonally adjusted unemployment rate for men increased to 4.8 percent (up 0.1 percentage points) and for women, to 5.7 percent (up 0.5 percentage points). Over the quarter 3,000 more men and 7,000 more women were unemployed.

Taranaki had the only significant change in unemployment rate over the year (up to 6.8 percent), up 2.9 percentage points from the December 2015 quarter. Gisborne/Hawke’s Bay and Northland continued to have the highest unemployment rates in the country, at 8.1 percent and 7.3 percent, respectively.

Unemployment rate annual percentage change by region

Number of people underutilised increases

The following section refers to unadjusted figures.

Underutilisation is a measure of potential labour supply and unmet needs for work. An underutilised person may be unemployed, underemployed, an unavailable jobseeker, or an available potential jobseeker.

In the December 2016 quarter, 25,900 more people were underutilised. Behind the rise were significant increases to the officially unemployed (up 12,300) and unavailable jobseekers (up 10,100 people). Unavailable jobseekers are those who are actively seeking work even though they are not currently available, but would become available within the next four weeks.

The underutilisation rate increased 0.6 percentage points to 12.8 percent in the December 2016 quarter. This change was not statistically significant.

Total underutilisation Quarterly Change - December 2016 quarter

More women in full-time employment

The seasonally adjusted number of people in full-time employment increased 1.6 percent (up 32,000 people) in the December 2016 quarter. The number of women rose 2.7 percent (up 21,000) while the number men in full-time employment rose 0.9 percent (up 11,000).

Over the same period, the seasonally adjusted number of people in part-time employment fell 2.2 percent (down 12,000 people). Part-time employment fell 1.7 percent (down 7,000) for women and 2.0 percent (down 3,000) for men.

Retail trade, accommodation, and food services leads employment growth

The largest contributor to national employment growth in the December 2016 quarter was the retail trade, accommodation, and food services industry, with 21,900 more people employed.

There were also significant employment increases in the construction and professional services industries, with 17,200 and 17,100 more people being employed over the quarter, respectively. However, these results should be interpreted with caution due to changes to the HLFS – to better identify the industry where people were employed. In the June and September 2016 quarters, a significant number of people had an unspecified industry.

See DataInfo+ for more information.

The following industries made the largest contributions to the increase in filled jobs (as reported by businesses in the QES) for the year to the December 2016 quarter:

  • professional, scientific, technical, administration, and support services (up 25,500 jobs)
  • construction (up 11,000 jobs)
  • accommodation and food services (up 10,300 jobs).

Youth NEET rate rises

The seasonally adjusted proportion of youth (15–24 years) not in employment, education, or training (NEET) rose to 13.6 percent (up 2.4 percentage points) in the December 2016 quarter. The increase in NEET rate over the quarter was for both youth aged 15 to 19 years and those aged 20 to 24 years.

These results need to be interpreted with caution as the results may be affected by changes to the survey questions that better identify those in education. The December 2016 quarter saw a large decrease for those 'not in the labour force, in education'.

See Household Labour Force Survey – summary of 2016 redevelopment for more information about changes to education questions in the HLFS.

See Household Labour Force Survey – Revisions to labour market estimates for more information about changes to NEET due to changes in the survey questions.

Wage growth steady

All the following movements are for the year to the December 2016 quarter.

The labour cost index (LCI) (including overtime) increased 1.6 percent. This measure of wage inflation reflects changes in the rates that employers pay to have the same job done to the same standard.

The unadjusted LCI increased 2.8 percent. This measure allows for quality changes within occupation as well as wage inflation.

Average ordinary-time hourly earnings, from the QES, increased 1.3 percent over the 2016 year. This measures shows changes in the average hourly wage bill across all jobs in surveyed industries and allows for compositional changes between and within industries. For example, if a large number of low-wage jobs and paid hours are lost in a quarter, average earnings will rise because the low-wage jobs are no longer contributing to the calculation of average earnings.

 

The annual increase in average ordinary time hourly earnings was the smallest since the September 2010 quarter. The subdued growth was due to more filled jobs in the healthcare and social assistance, and the accommodation and food services industries. A rise in the number of relatively lower-paid jobs caused average ordinary time hourly earnings in the healthcare and social assistance industry to fall 1.0 percent over 2016.

Average ordinary time weekly earnings (QES) increased 1.6 percent in the year ended December 2016, bringing them up to $1,129.72.

Public sector wage growth continues to exceed private sector

Over the 2016 year, the LCI (including overtime) for the public sector increased 1.8 percent, up from an annual 1.7 percent in the September 2016 quarter, while private sector wage growth was 1.6 percent. This is the second consecutive quarter that annual public sector wage growth has been higher than private sector wage growth.

The increase in the public sector LCI (including overtime) was influenced by the local government sector, which was 1.9 percent, up from an annual 1.8 percent in the September quarter. The LCI (including overtime) for the central government sector was unchanged at 1.7 percent.

LCI construction steady

In the year to the December 2016 quarter, salary and wage rate growth (including overtime) in the construction industry was unchanged at 2.1 percent.

Salary and wage rate growth (including overtime) in the Canterbury construction industry increased for the second consecutive quarter to 1.4 percent. This was up from a 1.1 percent increase in the September 2016 quarter, and no change from the same time a year ago. For the rest of New Zealand, wage rate growth in the construction industry eased to 2.2 percent, down from 2.3 percent in the September 2016 quarter.  

 

For more detailed data about labour market statistics, see the Excel tables in the 'Downloads' box.

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