KEY POINTS:
It is hardly a baby boom - but, in the year to September, the number of children born in New Zealand was 5.5 per cent higher than in the year before, and 8.6 per cent higher than the average over the past 10 years.
The fertility rate -
the number of births per woman - even made it back to 2.1, the level needed to replace the population, bucking what is now a 30-year-long trend of sub-replacement fertility.
But if that is the good news, the bad news is that natural increase in the population (births minus deaths) at 34,000 barely covered the net loss over the same period of New Zealanders to Australia, which was 27,000.
Over 35,000 New Zealanders crossed the ditch intending to stay for at least a year, 24 per cent more than the average over the past 10 years; only 8000 returned.
The country seems to have become a nursery for future Aussies.
For the reason we need look no further than the latest figures from the OECD on a key measure of relative economic performance: per capita gross domestic product on a purchasing power parity basis.
In 2005 New Zealand's per capita GDP was 15 per cent below the average for the 30 OECD countries. Australia's was 13 per cent above the average and therefore 33 per cent above ours. The gap is widening. In 2002 it was 29 per cent.
Comparing household spending rather than GDP, the gap is not quite so wide, 22 per cent, but then that just indicates that a larger share of Australia's GDP is investment, government spending and net exports.
And who would not welcome a 22 per cent increase in income?
On both sides of the Tasman the unemployment rate has been declining steadily since the early 1990s, to 3.5 per cent here and 4.3 per cent in Australia - its lowest level in 33 years.
China's growth and with it Australia's mining boom show no signs of flagging.
Given the common labour market and the income gap between the two countries, the message for New Zealand employers is clear: get used to a permanently, structurally, unrelentingly tight labour market. It is not going away.
Statistics New Zealand's projections for labour force growth have it growing more slowly over the next five years than over the past five years and more slowly still in the five years after that, until it stops growing at all in the mid-2020s.
That assumes historically medium rates of natural increase and an average net gain from migration of 10,000 a year, its long-run average. In the past year the migration gain was 7500.
Where all this leaves employers is in an environment utterly different from the 1990s, when there was a pool of excess labour released by the economic reforms and cowed by the Employment Contracts Act.
"Plenty more where you came from, pal" is an increasingly hollow threat.
There is some evidence in the official statistics that businesses recognise labour as an increasingly scarce resource and are shifting the emphasis from recruitment to retention.
Over the past five years the ratio of the average earning of new hires to the average earnings for continuing jobs has declined.
It is unlikely that the explanation for that is a declining demand for new labour. The surveys of business sentiment continue to record strong employment intentions and increasing difficulty in finding both skilled and unskilled labour.
Instead it looks like increased attention to retaining people.
The number of people employed has grown 1.5 per cent over the past year but all the growth has been in part-timers; full-time employment is 0.3 per cent lower than it was a year ago.
The labour force participation rate, which is the proportion of the population aged over 15 who are working or actively seeking work, hit an all-time high of 68.8 per cent in June. While it eased back to 68.3 per cent in September that is still a high rate by historic and international standards.
Recent growth in the participation rate has largely been driven by groups who have historically been underrepresented in the labour market, particularly women, ethnic minorities and older workers, the Department of Labour says.
It sees some potential for further gains among those groups, especially Pacific Islanders, but overall it does not expect the participation rate to get much higher, even in the short term. Increases from people being attracted into the labour force by higher wages and employment growth will be balanced by decreases due to an ageing population.
Clearly then growth is going to depend mainly on investment and productivity growth, rather than on ramping up the input of labour.
The focus has to shift from 'more to hands to the pump' to investing in a more efficient pump.
After all, the reason Australians are more productive, and therefore richer, than we are is not that they are smarter or work harder, but that they have much more physical capital employed per worker.
The statistics on this side of the Tasman are at least moving in the right direction. Business investment in plant and machinery in the year to June was 45 per cent higher in inflation-adjusted terms than it was five years ago and 83 per cent higher than 10 years ago.
Over the past 10 years the input of capital to the economy has grown three times faster than the input of labour - 33 per cent and 11 per cent respectively.
Unfortunately, while labour and capital inputs have been going up the efficiency with which they are used has declined.
Over the 1990s productivity gains accounted for the majority of GDP growth but since 2000 it has contributed only a fifth of it - 0.7 percentage points of the average growth rate of 3.4 per cent.
Some of that may reflect a period of labour hoarding as the economy went through a soft patch, with firms hanging on to staff for fear of not being able to replace them when business picks up.
But it suggests there are more fundamental constraints: infrastructure and skills deficits and the difficulty of getting economies of scale in a small economy.
At least it means the income gap with Australia, and most of the rest of the OECD, is not going to narrow quickly.
Robert Muldoon's old joke - that when a Kiwi moves to Australia it raises the average IQ on both sides of the Tasman - has a hollow ring to it.
