Prepare for a much tighter job market

Alexander is forecasting rapid jobs growth from late this year concentrated in construction, forestry and agriculture especially but also in manufacturing, information technology and real estate. Over 2012 retailing employment is expected to enter recovery period while construction will continue to power ahead driven by the rebuilding of Christchurch.

Public sector employment prospects, however, look poor given fiscal policy tightening, and tourism job prospects look mild for the next three quarters barring winter skiing areas and the time of the Rugby World Cup.

Alexander says the most interesting result from the recent NZIER’s latest quarterly survey of business opinion was the increase in the net percent of businesses saying they are finding both skilled and unskilled labour hard to find. “The labour market continued to tighten up over the March quarter and although labour supply is not acting as much of restraint on business growth, the direction of change is clear and will we believe strengthen tremendously from late this year.”

He says the BNZ’s forecast GDP growth of close to 4% over 2012 and 2013 implies jobs growth of between 2% and 3%, significantly above the annual average of 1.7% over the past 15 years.

For employers, Alexander says the main implications are:

• labour availability will tighten up quite quickly next year
• plans should be made for productivity-enhancing capital spending
• extra wage and non-wage labour costs will need to be budgeted for
• structures should be set up for recruitment of staff both locally and offshore
• branding should veer toward becoming preferred employer.

“For employees these developments will mean an improving range and number of jobs on offer, increasing ability to demand more flexible working conditions, and of course increasing ability to secure wage increases. Wages growth has slowed tremendously since 2008.”

• For the full BNZ State of the NZ Labour Market report visit tonyalexander.co.nz

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