Unemployment rose to 7.3% in the September 2012 quarter, which is its highest rate since June 1999, according to the latest data from Statistics New Zealand.
The Household Labour Force Survey data showed that employment had unexpectedly contracted in the September quarter – and the employment rate fell to 63.4%, Diane Ramsay from Statistics New Zealand said. “The unemployment rate has stayed between 6.4 and 6.8% over the past two years, and has now risen for the third quarter in a row.”
There were 13,000 more people unemployed in the September 2012 quarter – 10,000 more men and 3,000 more women, she added.
The survey data was a “true shocker” and indicated an unemployment rate much higher than anyone had thought plausible, Westpac chief economist Dominick Stephens said. “That said, we are taking a cautious approach to our interpretation. The HLFS has a history of throwing up wild false signals. Other labour market data we follow are saying that things are weak, but not quite this weak.”
However, all the indicators seemed to agree that New Zealand’s labour market has taken a turn for the worse – perhaps because the global downturn, high exchange rate and general economic uncertainty was hitting home with businesses, he said. “Perhaps there is an increasing mismatch between skills available and skills demanded: This quarter saw another sharp rise in the number of long-term unemployed, even as short-term unemployment has been gradually trending down, and ﬁrms continue to report that skilled staﬀ are getting harder to get.”
Stephens noted that the rise in unemployment was concentrated in the male workforce. There has been particularly large employment declines in industries where males tend to predominate, such as manufacturing, wholesale trade, and transport, he said.
It was also possible the recent weak employment growth might be the ﬂipside of what were unusually mild employment downturns in the 2008/2009 recession and then after the Canterbury earthquakes, Stephens added. “With the result now that ﬁrms have suﬃcient workers on their books to accommodate a modest increase in production without hiring new staﬀ.”