An economist is warning the unemployment rate is likely to get worse in coming months and could reach up to 6%due to the war in Iran, and there is increasing concern for young people struggling to find work.
The unemployment rate eased to 5.3% in the three months ended March, down slightly from the previous quarter.
A total of 163,000 people were unemployed - a fall of 2000 on the previous quarter but 7000 higher than a year ago.
Kiwibank chief economist Jarrod Kerr said today's data was "very outdated" and the full impact of the fuel crisis would be felt in the second or third quarter of this year.
Kiwibank was forecasting unemployment to reach 5.5%, Kerr said, but there was a chance it could reach 5.8% or 6% if conditions did not improve.
"We are hearing of [construction] projects being postponed, we are hearing of projects being cancelled, we are hearing of forestry crews being stood down because it's too expensive to cut-down trees at the moment."
He expected surging air fares and flight cancellations in the wake of the Iran war, led by the US and Israel that began on February 28 this year, to dent the tourism industry including the regions which had recently been performing well due to a strong export market.
"Tourism is the one we don't hear a lot about. It was our largest exporter prior to Covid, more than dairy. Now dairy's our number one. New Zealand's got such a large tourism sector, so for that to be falling back, it's a big negative for large parts of the country."
Kerr noted the numbers of people who were employed but needed to work more hours - the underutilisation rate - which was stubborn at 12.9%.
That wasn't a good sign, he said.
"Businesses, they cut hours before they cut heads... so you've got a workforce, you've trained them, in many cases you've worked with them for years, and a crisis hits. You cut their hours before you cut their jobs... that's where the slack shows up first."
ASB chief economist Nick Tuffley told RNZ's Midday Report programme today he expected the unemployment rate to reach 5.5% and would briefly stall the employment growth evident at the beginning of this year.
Tough for young jobseekers
A youth development advocate said he fears for the mental wellbeing of young people struggling to find work.
StatsNZ figures showed the number of 15-24 year-olds out of work rose from 13.3% to 14.4%.
Kickback co-founder Aaron Hendry told RNZ's Morning Report programme today the young people he worked with were doing everything right but were becoming increasingly hopeless.
"The young people Kickback serves are young people that have experience with homelessness, overcome huge amounts of adversity, and gone through some real hard stuff in life.
"The thing that they want is employment and they are dedicated to that. They work really hard to try to find employment but are constantly struggling and meeting more and more barriers.
"We've spoken to young people that have been looking for work for years, gone to all the training employment courses, gone to the programmes, done their CV 1000 times, volunteered, done all the right things, and yet have still not been able to find employment.
"The impact of that on a young person is pretty significant. It has an impact on your mental health, your well being, your sense of identity, that this is the time in your life as a rangatahi where you should be having hope and aspiration."
Hendry said teens required mentorship and more needed to be done to encourage employers to invest in their potential.
"There was a time when the job market was a little less competitive, where a young person or employer understood that they needed to mentor a young person into a job. Now, there is maybe an expectation that you turn up as a 30 year old when you're 16.
"We need to be ensuring that we're providing the mentoring, the guidance and support and realising that a young person is still a young person. They're still going to need some guidance, they're going to need some support.
"They're not going to be the full complete package, but we're going to have to invest in that potential."
Hendry said the building of new pathways for young people into employment was something that needed attention at central government level.
Bay of Plenty unemployment rate 'surprising' - mayor
Auckland, Wellington and the Bay of Plenty had the highest unemployment rates in the latest figures, between 6 and 7%.
Bay of Plenty's unemployment rate had increased to 7.1% in the March quarter, from 5.7% in the previous quarter.
Rotorua Mayor Tania Tapsell said she was "very surprised" to see the Bay of Plenty's unemployment rate rise and would be looking into why it had increased.
"I know that as a region we are actually doing quite well, and I hear from businesses that they are seeking employees as well - so again [I'm] very surprised."
She said it was concerning to hear families could be struggling.
Some conference and business events in Rotorua were looking at postponing due to the effect of fuel costs, Tapsell said, but in general, tourism in the city was "booming" and domestic flights had not been cut.
But Tauranga chamber of commerce chief executive Matt Cowley said tourism in the Eastern Bay of Plenty had been "patchy", forestry was "doing it tough", as well as some manufacturers exposed to the domestic market.
He cited Ballance Agri-Nutrients decision to end manufacturing operations in Mount Maunganui, and cut 60 jobs, as one example.
"Hospitality has been somewhat contracting due to reasonably tough summer periods," Cowley said.
Auckland and Wellington's unemployment rates remain high - Auckland's increasing from 6.4 to 6.6% in the March quarter, and Wellington's from 5.8 to 6.3%.
Kerr said Wellington had been in a "very dark place" over the last couple of years, due to public sector job cuts. Surveys consistently showed Wellington businesses were "downbeat", and Auckland, "not that much better".
He compared that to Canterbury where unemployment rates were 4.4% in the March quarter - up from 3.7% in the previous quarter - but the region was generally performing better than the North Island cities.
"I think Auckland and Wellington, they need to do something to drag themselves out of this funk that they're in."
Finance Minister Nicola Willis said in any economic recovery, unemployment was the last thing to recover.
"You're seeing that it is in the cities that that recovery has taken the longest to turn around. What we do see is the signs are there that the recovery is starting to latch on in those cities."
Willis said some businesses had been expanding, selling more and creating more jobs.
"What we need to do is give them every chance of continuing that in the months ahead, notwithstanding the events in the Middle East."
Labour's finance spokesperson Barbara Edmonds said the statistics were "nothing to sing about," even though the headline figure had come down.
"If you scratch a little bit deeper, that's 163,000 people who are out of work, and the unemployment levels being higher in Auckland now than it was 11 years ago, higher in Wellington than it was 12 years ago."
This story was first published on rnz.co.nz |  |
