4 Nov 2015

Unemployment 'likely' to rise further

10:06 pm on 4 November 2015

It is getting harder to find work, with unemployment hitting 6 percent in the September quarter.

An economist thinks it will get worse later, and trade unions are blaming the government. However, employers are taking it in their stride.

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Photo: 123RF

The latest official figures put the unemployment rate at 6 percent in the year to September, up slightly from 5.9 percent in the year to June.

Bill English announcing surplus, Oct 2015

Finance Minister Bill English Photo: RNZ / Claire Eastham-Farrelly

But, as well as looking at the number of people who have actually registered as unemployed, Statistics New Zealand looked at the total number of people who were actually doing a job.

This has fallen by 11,000 people in three months, and it is the first quarterly fall in three years.

It is also the largest increase in the number of people outside the workforce since March 2009.

Finance Minister Bill English said the higher unemployment rate was not surprising, given the slowing of the Christchurch rebuild and the drop in dairy prices.

The government did not intend to do anything specific to tackle rising unemployment, he said.

"We wouldn't be chasing round the unemployment numbers three months to three months.

"What we want to do is reinforce and encourage the industries that are doing well to invest and employ more people and grow."

Govt 'not hitting mark' on unemployment

Richard Wagstaff, PSA national secretary..

CTU president Richard Wagstaff Photo: Supplied

Council of Trade Unions president Richard Wagstaff, however, said the rise in unemployment showed a failure in government policy.

Cabinet should not try to hide behind the business cycle, he said.

"There is plenty of opportunity for better work and more work in New Zealand and government policies in New Zealand are just not hitting the mark," he said.

"They seem to have run out of ideas... Policies of promoting insecure work and lower wages just are not delivering."

EMA chief executive Kim Campbell.

EMA spokesperson Kim Campbell Photo: RNZ / Todd Niall

Auckland Employers and Manufacturing Association spokesperson Kim Campbell was more chipper. He said he expected the problem to get better as summer set in, and the impact of high immigration on the figures also needed to be taken into account.

A lack of skills among people looking for work was another problem, he said.

"One of the things we are finding is a mismatch between the skills which are existing [in] the economy and the jobs," he said.

"So you end up with vacancies unfilled and people looking for work with skills that are not suitable for the jobs which are there."

A 'softening in economic activity'

Statistics New Zealand indicated the unemployment rate could have been worse if more people were actually looking for jobs - those that were not did not count towards it.

Westpac senior economist Satish Ranchhod blamed the state of the economy for those people who he said were not even trying to get jobs.

"I think what we have seen over the past year is a softening in economic activity," he said.

"That has through to softer confidence amongst households and business and it does seem to have passed through into fewer people looking for work, particularly among older New Zealanders."

The construction and retail sectors remained strong job creators but there were losses in the financial, transport and business services sectors, Mr Ranchhod said.

"Over the coming year, the economy is going to face some pretty significant headwinds and it's likely we'll see the unemployment push up."

The number of people in work had been growing by 3 percent a year in the year until June.

The drop in the past three months, however, has pulled annual employment growth down to just 1.5 percent in the year to Septermber.

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