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Labour Market Statistics: June 2017 quarter
Embargoed until 10:45am  –  02 August 2017
Commentary

Employment rate drops to 66.7 percent

In the June 2017 quarter, the seasonally adjusted employment rate fell 0.4 percentage points (down 4,000 people) to 66.7 percent. This drop follows six quarters in which employment rose.

Labour Market Diagram

Due to rounding, the seasonally adjusted breakdowns do not always add to the total change.

New Zealand’s working-age population increased by 0.5 percent in the June 2017 quarter (up 20,000 people) to 3,801,000. This is the first quarter since September 2015 that employment growth has been below population growth.  

The fall in employment primarily came from 5,000 fewer men being in employment this quarter (down 0.4 percent), while the number of women in employment increased by 1,000 (0.1 percent).

Over the year to the June 2017 quarter, the seasonally adjusted employment rate increased 0.5 percentage points, from 66.2 percent to 66.7 percent.

Unemployment rate down to 4.8 percent

The seasonally adjusted unemployment rate dropped to 4.8 percent in the June 2017 quarter, falling 0.1 percentage points from 4.9 percent in the March 2017 quarter (down 3,000 people). This is the lowest unemployment rate since the December 2008 quarter, when it was 4.4 percent.

The fall in unemployment over the quarter came primarily from 10,000 fewer women being unemployed. This pushed the female unemployment rate down 0.8 percentage points to 4.9 percent – the lowest unemployment rate for women since the March 2009 quarter. 

 

 

 

The male unemployment rate rose by 0.5 percentage points (up 7,000 men) to 4.7 percent in the June 2017 quarter.

Annual unemployment rate down in Nelson/Tasman/Marlborough/West Coast

The only region with a statistically significant annual change in unemployment rate was the Nelson/Tasman/Marlborough/ West Coast region, which dropped 2.9 percentage points to 3.0 percent. This represents 2,800 fewer unemployed people in the region.

Regional Unemployment Rate Map

Labour force participation rate down

The labour force participation rate decreased by 0.6 percentage points (down 7,000 people) over the latest quarter, to 70.0 percent. The labour force comprises people in the working-age population who are either employed or unemployed. In the June 2017 quarter, 9,000 fewer women were in the labour force (down 0.7 percent) than in the March 2017 quarter.

The number of people ‘not in the labour force’ (NILF) increased by 26,000 over the June 2017 quarter (up 2.4 percent) – 20,000 of those who joined the NILF group were women.

Employment up over the year

Over the year to the June 2017 quarter, the unadjusted employment rate increased to 66.5 percent (up 0.4 percentage points) from 66.1 percent in the June 2016 quarter. This demonstrated 76,200 more people were employed over the year(up 3.1 percent).

Auckland had a statistically significant increase of 35,700 more people in employment over the June 2017 year (up 4.2 percent). Significant employment growth also occurred in Waikato (14,200 people, up 6.2 percent); Otago (5,800 people, up 5.1 percent); and Wellington (12,500, up 4.4 percent).

Employment up across multiple industries

Over the June 2017 year, several industries (as measured by the HLFS) had significant employment growth: 

  • professional, scientific, technical, administration and support services industry up 31,600 (11.1 percent)
  • construction up 18,000 (8.3 percent)
  • education and training up 16,700 (7.8 percent)
  • transport, postal, and warehousing up 11,700 (12.4 percent)
  • rental, hiring, and real estate services up 10,100 (24.4 percent).

Unadjusted filled jobs (as measured by the QES) increased 3.0 percent (up 56,600 jobs) over the year. By industry, the main contributors to this growth were:

  • professional, scientific, technical, administration, and support services (up 23,000 jobs)
  • construction (up 18,200 jobs)
  • accommodation and food services (up 15,600 jobs).

Underutilisation drops

In the June 2017 quarter, the seasonally adjusted underutilisation rate fell by 0.5 percentage points to 11.8 percent. This represents 13,000 fewer underutilised people, down to 327,000.

Underutilisation is a measure of the potential labour supply and unmet need for work. An underutilised person may be unemployed, underemployed (wanting more hours), an unavailable jobseeker, or an available potential jobseeker.

Stats NZ has expanded the existing suite of underutilisation statistics, by now seasonally adjusting this series as well as providing breakdowns by ethnicity and region.

DataInfo+ has more information.

NEET rate drops to 11.1 percent

The seasonally adjusted proportion of youth (15–24 years) not in employment, education, or training (NEET) was 11.1 percent in the June 2017 quarter, falling 1.6 percentage points from the March 2017 quarter (down 12,000 people).

The female NEET rate was 12.2 percent, a 1.5 percentage-point drop (down 5,000) over the quarter. This is the lowest female NEET rate since the series began in March 2004. The male NEET rate was 10.1 percent in the June 2017 quarter, down 1.8 percentage points (down 7,000).

The NEET rate for those aged 15–19 years dropped 1.6 percentage points (down 6,000 people) to reach 8.8 percent. The NEET rate for the 20–24 years age group also fell 1.6 percentage points (down 6,000 people) to 13.2 percent – the second-lowest NEET rate since the beginning of the series.

Over the latest quarter, there was an increase of 16,000 people in the 15–24 years age group who were not in the labour force and were in education (8.4 percent).

Wage rates grow 1.7 percent

All the following movements are for the year to the June 2017 quarter.

The labour cost index (LCI) salary and wage rates (including overtime) increased 1.7 percent in the year. This measure of wage inflation reflects changes in the rates employers pay to have the same job done to the same standard.

Public sector annual wage rates increased 1.9 percent. Wage rates in the private sector increased by 1.6 percent. For the fourth quarter in a row, private sector wage inflation was lower than public sector inflation.  

Within the public sector, all salary and wage rates for education and training increased 2.4 percent in the year. Part of this was due to the Ministry of Education’s renegotiated collective employment agreements. For some teachers, the collective pay increases awarded for the last two calendar years were both shown in the LCI for the June 2017 year.

This growth in wages in the education and training industry was reflected in the QES as well, with average hourly earnings in that industry rising 5.4 percent over the year, to $35.81 per hour.

The adult minimum wage increase on 1 April, 2017, from $15.25 an hour to $15.75 an hour, contributed to wage inflation. The impact of this change was most noticeable in accommodation and food services and retail industries. The minimum wage change also affected skill level 5, which includes occupations that require no qualifications, a New Zealand Register level 1 qualification, or a short period of on-the-job training.

In the June 2017 quarter, the LCI showed an increase in 16 percent of all surveyed salary and ordinary time wage rates. Of these, 4 percent had the minimum wage increase as a factor.

The changes to carers’ wages from the Care and Support Worker (Pay Equity) Settlement Bill (2017) took effect from 1 July 2017, which is the start of the September 2017 quarter.

Wages up for women

Average ordinary-time hourly earnings from the QES increased by 1.6 percent over the year. The main causes were pay increases in the education, healthcare, public admin, and retail trade industries. A large increase in the number of filled jobs in the professional, scientific, technical, administration, and support services industry also contributed, as this industry continues to have relatively high hourly earnings.

Growth in average ordinary-time hourly earnings was particularly strong for women in the year to June 2017, increasing $0.66 (up 2.4 percent) to $28.03. By comparison, male average hourly earnings in the latest quarter were up $0.29 for the year to $31.82 (up 0.9 percent). Female average ordinary-time hourly earnings rose approximately twice as much as for males, both quarterly and annually.

 

The difference between wage growth for the sexes can be explained by several of the industries that had pay increases in June 2017 having a high percentage of female employees (eg education and training and retail trade).

Annual CPI inflation at 1.7 percent

In the year to the June 2017 quarter, prices of goods and services bought by households, as measured by the consumers price index (CPI), increased 1.7 percent. In the same period, the LCI also increased 1.7 percent.

 

 

Annual CPI inflation dropped from 2.2 percent in the March 2017 quarter to 1.7 percent in the latest quarter. The LCI increased from 1.6 percent to 1.7 percent. The change in the CPI was influenced by recent price falls for petrol.

Higher unemployment rate for disabled people

From the June 2017 quarter, we are collecting data for people’s disability status annually in the HLFS. This enables us to report on different labour market outcomes for disabled people and non-disabled people in June quarters.

People are classified as disabled if they are either having a lot of difficulty or are incapable of: seeing or hearing (even with aids), walking or climbing stairs, remembering or concentrating, self-care, or communicating.

Improving New Zealand Disability Data has more information on this new measure and disability classifications.

In the June 2017 quarter, 11.4 percent of disabled people in the labour force were unemployed, compared with 4.5 percent of those without a disability.

The employment rate for disabled people was 22.4 percent, while it was 69.3 percent for those who were not disabled.

See the HFLS supplementary table in the ‘Downloads’ box for more data.

More detailed information will be available in a series of articles due to be released in September 2017.

Spotlight on involuntary self-employment

In the June 2016 quarter, we introduced new measures to the HLFS, including a measure on involuntary self-employment. This is where someone is self-employed primarily because waged or salaried work is unavailable, rather than from personal choice.

The June 2017 quarter showed the majority of self-employed people are satisfied being self-employed. Only 5.1 percent of self-employed reported they would prefer to work for an employer.

Although men (60.3 percent) make up a larger proportion of self-employed than women (39.7 percent), the involuntary self-employment rate for women (6.7 percent) was higher than the rate for men (4.0 percent).

People aged 15–24 years made up 2.5 percent of all self-employed, similar to their proportion of all employed people (2.1 percent). However, this age group had the highest involuntary self-employment rate (16 percent), more than twice the rate of any other age group.

The involuntary self-employment rate for Māori was 10.6 percent, more than double the rate of Asian people (3.9 percent) or Europeans (4.9 percent).

Self-employed people who prefer self-employment worked a median of 40 hours. Involuntary self-employed people worked a median of 30 hours. 

For more detailed data on the labour market see the Excel tables in the ‘Downloads’ box.

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