Unemployment figures in New Zealand nearing pre-Covid levels.

Been covering unemployment with my Yr 13 class and showed them this graph today during our online class. As well as talking about recent changes it was useful to mention the boom period in the early 2000’s, the GFC in 2007 and how they impacted the level of unemployment. Also note the correlation between the labour cost index (changes in wages and salaries) and the unemployment rate. As labour becomes more scarce (lower levels unemployment) the LCI starts to rise and vice versa.

Source: Westpac Economic Overview. February 2021

The most recent figures publish show that the unemployment rate in New Zealand fell 0.4 percentage points to 4.9 percent in the December 2020 quarter which surprised a lot of commentators who predicted an increase. This time last year the unemployment rate was 4.1%. The number of those unemployed fell by 10,000 to 141,000 in the December quarter, while the number of those employed rose by 17,000 to 2,734,000 in seasonally adjusted terms. The proportion of the working-age population that were in the labour force also rose in the quarter. The labour force has seen sectors affected in different ways:

Negative – sectors in retail, hospitality and transport have seen major job losses.
Positive – with increased government spending there was employment growth in health, education and public services. Employment in the construction industry expanded by 8.2 percent between the December quarters, with Stats NZ reporting that more people were “working in areas such as plumbing and electrical services, roofing, and concreting”.

Differences in the economic fortunes of various sectors explain why there are reports of skill shortages at the same time as unemployment has risen. On the whole New Zealand is in a very lucky position relative to other parts of the world.

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