Employment figures suggest improvement

The labour market continues to steadily improve, judging from figures released yesterday. But an industry group is warning that cheap imports are costing local jobs.

Statistics New Zealand figures show the unemployment rate was in line with market expectations at 6.5% in the year ended June.

Apart from Canterbury, it appeared the labour market was continuing to improve steadily.

Full-time employment rose 0.2% in the three months ended June, the sixth consecutive increase.

Westpac chief economist Dominick Stephens said that beneath the surface, there were clear signs of ongoing rapid economic recovery in the wider economy.

The 1.6% increase in hours worked added to the growing body of evidence suggesting that the pace of GDP growth in June was similar to March, at 0.8%, he said.

However, Steel Construction New Zealand manager Alistair Fussell said analysis showed that in the 2009 year, steelwork imported into New Zealand increased by $43 million, resulting in the loss of more than 150 jobs in the steel construction sector, as well as the associated tax revenue.

It should be mandatory for New Zealand steel firms with appropriate credentials to be considered as potential suppliers for major projects.

"The reality is that too many procurement decisions for major projects in both the public and private sectors are based on price and this has led to imports of cheap fabricated steel tripling over the past five years," he said.

More effective public sector procurement practices would see government entities working with local suppliers to build local capability and develop innovative solutions, Mr Fussell said.

The Service and Food Workers Union yesterday presented a petition to the Primary Production Select Committee calling for an inquiry into the industry.

Union spokesman Neville Donaldson said the union had conducted a long campaign to have the issues addressed, including the devastating job cuts in the industry as a result of changes in the last decade.

"Obviously, the inquiry needs to investigate the appalling conditions on foreign vessels fishing in our exclusive economic zone.

"But it needs to go further and investigate the impact on employment and job skills of Maori workers who have traditionally made up a large percentage of the workforce."

At a time when Maori unemployment had risen to more than 16%, the issue was more important than ever, Mr Donaldson said.

ASB economist Jane Turner said there was no ambiguity in the unemployment data.

The labour market recovered further in the second quarter, with the lift in employment consistent with the quarterly employment survey data and market expectations.

As expected, Christchurch employment was heavily affected by the earthquake. Outside Christchurch, the recovery had been "very impressive" in the first half of the year, confirming the underlying momentum in the economic recovery continued through to June.

"The Reserve Bank will be very encouraged by this result which will further convince the bank to increase the official cash rate by 0.5% in September, with the insurance cut clearly no longer needed," she said.

Employment Minister Paula Bennett said in a statement that while the unemployment rate remained steady, more New Zealanders were in work in the three months ended June.

There were now more than 2.21 million New Zealanders in work, with another 61,000 jobs created since 2009.

"Some of the trends we're seeing are more full-time jobs, more women in work, increasing wages and more hours for workers."

The number of young people in work had risen by more than 5400 in the year to June. The number of young people not in education, employment or training had fallen from 10.7% to 9.8%.

The number of unemployed 20- to 24-year-olds had dropped by 4000 (13%) while those employed rose by 9.2%, Ms Bennett said.

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At a glance
Unemployment rate - 6.5%
Otago (unadjusted) - 5.3%
Participation rate - 68.4%
Unemployed - 154,000
Employed - 2.21 million
Not in labour force - 1.1 million

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