New Zealand's rapid jobs growth and record participation in the first three months of the year show the country's high migration is getting mopped up by the local labour market and hasn't driven up wages.
Employment grew 0.9 percent in the quarter, ahead of economists' forecast of 0.6 percent, and
was up 3.7 percent on the year, according to Statistics New Zealand. The participation rate rose 0.4 of a percentage point to 69.3 percent, the highest level since the series began in 1986, and ahead of the 68.8 percent forecast.
Still, that didn't fuel higher wages, with the labour cost index, which measures wage inflation, rising at a quarterly pace of 0.4 percent across all sectors and including overtime for an annual lift of 1.6 percent. Private sector ordinary time wages rose at a quarterly pace of 0.3 percent, ahead of the 0.2 percent increase in public sector pay.
"The data shows unequivocally the economy's on fire," said Stephen Toplis, head of research at Bank of New Zealand in Wellington. "A substantial amount of migration is going straight into employment, which is spurring domestic growth, but at the same time alleviating pressures that might be on the labour market."
The country's net inbound migration was at an 11-year high in March as fewer kiwis shift to Australia as the economic fortunes of the neighbouring nations turn to New Zealand's favour. Those growth prospects have also helped attract new migrants, with larger net inflows across Asian nations including China and India.
