Manpower Employment Outlook Survey

Manpower Employment Outlook Survey

8 March 2011

Hiring confidence softens among New Zealand employers in second quarter: Manpower Employment Outlook Survey

Construction industry sector hiring set to buoy the rest of the employment market

New Zealand employers have taken a step back in hiring intentions after a series of hits to national confidence, according to the latest Manpower Employment Outlook Survey.

The survey of more than 650 New Zealand employers indicates hiring for the second quarter of 2011 has dropped by two percentage points, with a seasonally adjusted Net Employment Outlook (NEO) of +15% (down from +17% in Q.1). The number of employers planning to increase hiring has risen to 26 per cent (up from 24 per cent last quarter), while the number of employers planning to reduce staffing levels has remained steady at 8 per cent.

According to Lincoln Crawley, Managing Director of Manpower Australia and New Zealand, New Zealand has had several significant events that have had a negative impact on confidence levels across the board.

“New Zealand is facing the early onset of drought in Northland and Waikato, an ongoing housing market slump, a rise in GST and fuel prices and not to mention the impact of the earthquakes in the Christchurch region. All of these events and the uncertainty they bring will impact employers’ willingness to hire,” said Mr Crawley.

Employers in the Public Administration (-3%) and the Wholesale & Retail Trade (+5%) report the largest declines in hiring optimism this quarter when compared with the previous quarter, down 8 and 5 percentage points, respectively.

Meanwhile, the Outlook in the Mining & Construction sector has skyrocketed, up 20 percentage points since Q1 to +42%. This jump in hiring expectations has filtered through to the Transport & Utilities sector, sitting at +22% (up from +12% last quarter.)

According to Mr. Crawley, the country’s Mining & Construction and Transport & Utilities sectors are buoying the rest of the employment market, as rebuilding efforts in Christchurch and the Canterbury region after the recent earthquakes start to take shape.

“Reconstruction spending in the areas devastated by the earthquakes in September and March has been estimated in the tens of billions, but the true cost of the disaster won’t be known for years,” said Mr. Crawley. “While rebuilding is expected to peak in the last quarter of this year, we’re going to see strong hiring expectations in Construction and Transport for the next few quarters.”

With skilled tradespeople and engineers already in New Zealand’s top five skills shortages (according to Manpower’s 2010 Talent Shortage Survey) , Mr. Crawley said the pressure to find skilled staff will increase significantly for the Mining & Construction sector.

“One of the dangers in any major rebuilding effort is poaching skills from other parts of the country and other industries to feed the talent shortage on the ground. To some extent, this is inevitable but we need to think strategically about where the skills will come from and what projects will be stalled as a result,” said Mr. Crawley.

Regionally, hiring optimism in Auckland and Christchurch increased by 2 percentage points, with their Net Employment Outlooks now sitting above the national average, at +18% and +16%, respectively. Employer optimism in Wellington dropped by 2 percentage points to +12%.

Net Employment Outlook Comparison Chart

Q2 2011 Quarter-on-quarter change Year-on-year change
National +15% -2% 1%
Finance, insurance & real estate +11% 0% -20%
Manufacturing +20% 0% 0%
Mining & construction +42% 20% 19%
Public admin/education -3% -8% -10%
Services +21% 0% 7%
Transport & utilities +22% 10% 19%
Wholesale & retail trade +5% -3% -6%

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