Labour Market Trends and Outlook

This paper provides an overview of trends in the New Zealand economy and labour market in 2001 and 2002, and the outlook for 2003 and 2004. More people than ever before have been attracted into the New Zealand labour market during the last two years -from outside the labour force and from around the world- encouraged by robust growth in employment and wages, low unemployment, and employers who are finding it difficult to find suitable staff. The main driver of improving labour market conditions has been strong growth in the New Zealand economy (an average of 3 ½ per cent per annum in the last three years), despite the recent downturn in the world economy. The pattern of economic growth has changed in recent years, leading to varying rates of employment growth by industry and region. Nevertheless, labour market conditions have improved across the majority of regions, as well as across most of the broad ethnic and age groups, and by gender. The outlook is for the New Zealand economy to experience solid growth over the next two years, although there are important upside and downside risks. The positive central outlook is expected to see labour market conditions remain relatively strong during 2003 and 2004