Audrey Young

Audrey Young is the New Zealand Herald’s political editor.

Cities muffle Christchurch growth

Job vacancies flat-lining or backtracking in Auckland and Wellington as Key prepares to announce cuts.

Auckland and Wellington are still dragging down New Zealand's job market, despite spectacular earthquake recovery-related growth in Christchurch.

Prime Minister John Key said the latest bout of redundancies, with at least 100 people at the Conservation Department expected to be laid off today, would not be in front-line jobs, implying many may be in Wellington.

Surveys by Seek, the ANZ Bank and the Ministry of Business, Innovation and Employment all show that job vacancies have flatlined in Auckland and trended downwards in Wellington over the past two years.

There has been a huge leap in rebuilding-related vacancies in Christchurch, but Stronger Christchurch Infrastructure Rebuild team manager Duncan Gibb said many were being filled by immigrants.

"We've got loads of Irish designers and people from all over the place," he said.

He estimated that only 100 of the 1900 people working for the team's five member companies were previously unemployed.

"Another 100 came in from complete career changes and 400 or 500 are subcontracting crews from out of town," he said.

Mr Key said yesterday that in any three-month period New Zealand created about 100,000 new jobs and lost about 100,000 jobs.

"Few more are created than are lost, but it's a very fluid market, it's not just people losing their jobs," he said.

Council of Trade Unions economist Dr Bill Rosenberg said those figures were broadly correct: 108,200 jobs were created and 116,000 were lost in the last quarter for which this data is available, July to September 2011.

In net terms, employment dropped in the global financial crisis of 2008-09 and recovered slightly in 2010-11, but the picture since then suggests the recovery stalled. Statistics NZ's quarterly survey of employers recorded a gain of 23,600 jobs (1.4 per cent) last year, but its survey of households estimated a drop of 30,000 (1.3 per cent).

A consensus of forecasts collected by the NZ Institute of Economic Research last week pointed to an employment decline of 0.7 per cent in the year ending this week, but with job gains of about 2 per cent a year expected in the next two years.

ANZ Bank economist Sharon Zollner said the three-month running average for job vacancies was still slightly lower than it was a year ago.

"I'd have to look at those job ads and say there's nothing happening, and we've had population growth in that time, so as a percentage of the population [employed] we've been going backwards," she said.

There had been some growth in call centres and food manufacturing transferring jobs from Australia, she said.

"But while we are grateful for the employment, pulling in jobs just by being lower-cost than Australia isn't the road to long-term prosperity as a nation. There is no point in trying to be the India of the South Pacific," she said.

Statistically, the biggest increase in jobs in the past five years has been in health and social assistance - up by 30,700 (15 per cent). Doctors and nurses in district health boards account for only 3729 of these jobs since November 2008, implying that most may be in private sector home care and other services for the elderly.

Retirement Villages Association director John Collyns said 63 of the country's 345 retirement villages were being newly built or expanded, accounting for half of all building permits for new apartments.

Mr Key predicted that unemployment would drop this year from its current 6.9 per cent.

"The projections we are still seeing are that unemployment will track nearer to 6 per cent by the end of the year and hopefully something with a 5 in front of it for 2014," he said.

"So yes, of course, there are job losses, some of them very high profile or potential job losses as has been discussed with Telecom, but there are many activities that I go to in any given week where we are also going to businesses that are in the process of creating jobs and looking for new staff."

- NZ Herald

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