Employment outlook mixed bag, says OECD

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Hiring confidence among New Zealand employers remains strong for the final quarter of the year, according to the latest Manpower Employment Outlook Survey.

New Zealand employers report a Net Employment Outlook of +26%, stable from quarter three this year and up nine percentage points from quarter four in 2013.

Of the employers surveyed, 33% anticipate an increase in their staff levels, 6% anticipate staff reductions, and 60% expect no change in their hiring plans.

Lincoln Crawley, Managing Director ManpowerGroup Australia and New Zealand, said the overall employment picture is positive.

"There is a little bit of nervousness around the upcoming election. However, compared with previous election years, where we would see a dip in hiring, activity has remained positive and companies are business-as-usual," he said.

Of the three regions only employers in Wellington recorded a slight decrease, reporting an Outlook of +23%, down two percentage points quarter-on-quarter. Auckland and Christchurch employers recorded Outlooks of +27% and +29%, up one and three percentage points, respectively.

While the New Zealand employment situation is looking positive the latest Employment Outlook report for the OECD has found the unemployment will remain above pre-crisis levels in most OECD countries despite modest declines.

The Employment Outlook 2014 report states that average jobless rates will decrease slightly over the next 18 months in the OECD area, from 7.4% in mid-2014 to 7.1% at the end of 2015. According to the report almost 45 million people are out of work in OECD countries, 12.1 million more than just before the financial crisis. 

The report states that long-term unemployment has likely peaked but remains a major concern. It found that just over 16 million people – over one in three of the unemployed – had been out of work for 12 months or more in the first quarter of 2014, almost double the number at the start of the crisis.

While New Zealand's unemployed numbers are on the decrease, the report found the jobless outlook diverges widely among countries with unemployment falling but still remaining very high in Spain (around 24%) and Greece (around 27%). The euro area will see joblessness decline to 11.2% at the end of 2015, from 11.6% in mid-2014. Unemployment is forecast to fall below 5% by the end of 2015 in Austria, Germany, Iceland, Japan, Korea, Mexico, Norway and Switzerland. 

The report also found that real wage growth has come to a virtual standstill since 2009 and wages actually fell in a number of countries by between 2% and 5% a year on average, including in Greece, Portugal, Ireland and Spain. It states that the slowdown in wages has been “fairly evenly spread” across the earnings distribution. 

OECD Secretary-General Angel Gurría said wage cuts have helped contain job losses and restore competitiveness to countries with large deficits before the crisis, but warned further reductions may be counterproductive and neither create jobs nor boost demand.

“Governments around the world, including the major emerging economies, must focus on strengthening economic growth and the most effective way is through structural reforms to enhance competition in product and services markets. This will boost investment, productivity, jobs, earnings and well-being,” he said.

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