Economic and Labour Market Update - February 2010

Data released recently by Statistics New Zealand shows the extent of the recession on Auckland’s labour force and building activity. This report focuses on movements in these two areas, with a particular focus on labour force participation and unemployment rates among various groups in the population.

As Figure 1 below shows, there has been a steady decrease overall in the number of consents issued for new residential buildings since 2003. The year 2009 had the lowest number recorded since the series began, at 2,655 consents.

Manukau city has had the bulk of these consents, followed by Rodney district and Auckland city.

Figure 1: Number of consents issued for residential building consents (Auckland region) 2000-2009

Similarly, the number of commercial building unit consents issued declined dramatically in 2009, with 519 consents for the region. This is less than half of those issued in the peak years of 2002 and 2004. Over the ten year period to 2009, one fifth of these business units were issued in each of Auckland city, Rodney district and Manukau city.

Figure 2: Number of consents for commercial building units (Auckland region) 2000-2009

At the end of the December 2009 quarter, Auckland’s unemployment rate had increased to 8.0% and was higher than the national rate of 7.3%.

However, looking at the annual average, the unemployment rate increased from 4.7%at the year ending December 2008 to 6.9% at the year end December 2009. There was a slight decrease in the overall proportion of those employed who work full time.

Table 1: Snapshot: Labour force status to Dec 2009 quarter, previous quarter and previous year

Participation in the labour force depends on ability (physical, household choices) and willingness to work, alternative choices (such as education) and the condition of the labour market.

As might be expected, there was an overall decline in the labour force participation rate from 68.9% in year end December 2008 to 67.9% in year end December 2009. Table 2 shows there were decreases in this rate across all age groups, both genders and all ethnic groups, with the exception of those aged 40 to 54 years and among Asian, who recorded slight increases.

One of the biggest decreases in labour force participation was among those aged 15-19 year old, declining from 48% to 42.3% between December 2008 and 2009.

Table 2: Labour force participation rate by age, gender and ethnicity (%)

This decrease in labour force participation among youth in the Auckland region also shows clearly in unemployment figures. Unemployment among youth has been higher than other age groups for some time in the region, but appears to have increased in the last year at a higher rate than other age groups (refer to Figure 3 and Table 3).

For the year ended December 2009, one in four (24.2%) of 15-19 year olds in the labour force (that is, for example, not in full time education) were unemployed, while 14.2% of 20-24 year olds were unemployed. This was an increase from the previous year, and also an increase from the previous quarter (Figure 3).

Figure 3: Unemployment rate by age group (rolling annual average) to year end December 2009

As the table below shows, unemployment rates have increased in the year to December 2009 across the board, however there have been particularly high increases among youth, as discussed, and among Pacific peoples and Mäori. On average, 14.2% of Pacific workers were unemployed for the year ended December 2009, up from 7.4% the previous year. Similarly, the rate for Mäori increased from an annual average of 8% in December 2008 to 12.8% in 2009. By comparison, the unemployment rate for Europeans increased from 3.6% to 5% for the corresponding time.

Table 3: Unemployment rate by age, sex and ethnicity, December 2009.

Figure 4: Unemployment by ethnic group (rolling annual average) to yr end Dec 2009

Notes:

The Asian category was introduced to the series in the December 2007 quarter.

At the year end Dec 2009, there was an overall decrease in the numbers employed in the: manufacturing; utilities and construction; wholesale and retail; and communication industries. There was a slight increase in the number of those employed in: property and business services; education; health and community services.

If we look at the percentage within each industry working full time (30 hours or more per week), it is apparent that while there was an overall slight downward movement from 79.2% to 78.5%, some sectors experienced an upward movement, including the primary, wholesale and retail, communication services and property and business services sectors.

The gains in numbers working in education and health sectors were offset by a decrease in numbers working full time. These changes are slight however.

Table 4: Employment by industry