Lift in employment fails to materialise

Government claims of a slow sustained recovery in the economy will be put to the test in the next few months, as New Zealand's unemployment rate edges up and a modest lift in employment fails to materialise.

Employment fell fractionally in the June quarter, due to a surprisingly sharp fall in Canterbury employment. Outside Canterbury, employment lifted, recovering from weaker results during the last six months.

This week, Social Development Minister Paula Bennett headed a press release with: "Canterbury employment remains a high priority". The minister went on to announce a deal with Hawkins Construction, Fletcher Building and Work and Income about taking on job seekers.

Since August last year, Hawkins had taken on 60 Christchurch job seekers and in the last nine months, Fletcher Building had employed 26 local people who were on benefits.

Statistics New Zealand figures showed the weakness in overall employment levels was driven entirely by a 6.6% quarterly fall in Canterbury employment after a promising 5.1% gain in March.

ASB economist Jane Turner had been expecting further gains in Canterbury employment, given building consents and cement usage suggested further acceleration in earthquake reconstruction activity in the region.

"Employment figures are often quite volatile even at a national level - let alone a regional level. Nevertheless, we will be watching retail and construction data over the next month for indications of whether the rebuild is still picking up momentum or temporarily stalled last quarter."

Ms Turner maintained the second quarter GDP forecast of 0.3% growth, at this stage.

Green Party co-leader Metiria Turei said the latest "dire unemployment statistics" were a testament to the failed economic management of the John Key-led Government.

"More than three years since John Key promised New Zealand he would have an 'unrelenting focus on jobs', unemployment is still rising.

"While National ministers are slapping themselves on the back for programmes that get a handful of people into work, the number of people out of work under their watch has ballooned by 65,000."

When those who had given up looking were counted alongside the official unemployed, there were more than a quarter of a million jobless Kiwis, she said.

Tertiary Education, Skills and Employment Minister Steven Joyce said the latest household labour force survey underlined the need for New Zealand to take up all its opportunities for productive growth.

The results showed it was important businesses were allowed the opportunity to grow and create jobs across the economy.

That included the intensification of agriculture, the development of aquaculture, greater foreign investment, encouraging hi-tech industries, expanding oil and gas exploration and progressing an international convention centre in Auckland, he said in a direct reference to many Green Party policies opposing that sort of development.

"Those that oppose some or all of these things need to understand you can't have more jobs without taking up these opportunities.

"It's vital that we put out the welcome mat to businesses given the backdrop of the global financial crisis and the ongoing impact of the Canterbury earthquakes," Mr Joyce said.

Across the Tasman, Australia's unemployment fell to 5.2% in July, from 5.3% the previous month, the Australian Bureau of Statistics said yesterday. There was a rise of 14,000 in total employment in July.

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At a glance
• Unemployment rises to 6.8% in June
• Employment rate falls to 63.8%
• 162,000 people unemployed, the highest since 1994
• 5000 fewer men in employment, 3000 more women in employment
• OCR on hold until June next year

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