Hiring intentions picking up

Marc Burrage. Photo / Supplied

The labour market is beginning to catch up with the tentative growth of the economy, a survey by a recruitment agency shows.

The quarterly Hudson hiring expectations report showed 21.9 per cent of hiring managers surveyed intended to increase permanent staff numbers in the coming three months, up from 15.9 per cent in the previous quarter.

The Hudson surveys showed negative growth and declines in hiring intentions from the end of 2007 until a turnaround in the June quarter of this year.

Westpac Economist Dominick Stephens said he expected the positive trend to continue. "New Zealand's recession ended in about April, and labour markets tend to lag economic activity, so we would expect over the next few months for labour market activity to start picking up.

"We have already seen a number of anecdotes that employment is picking up, although whether it is enough to offset population growth and actually reduce unemployment is another matter."

Several industries were leading the hiring-intentions charge - including IT, where a net 25 per cent of employers said they intended to increase permanent staff, and construction, property and engineering, where a net 15.4 per cent said they intended to.

Stephens said he expected residential construction to become a major employer in the next 12 months. "A situation of housing shortage is developing at the moment, and the thing that has been holding construction back has been difficulty with financing.

"I think that large firms are going to overcome those difficulties, using their balance sheets in one way or another. I think residential construction will be the outperformer for employment growth over the next year."

Hudson interviewed 1501 hiring managers from small, medium and large companies for the survey, which covers all the major New Zealand industries. The survey also showed businesses in every region have increased intentions to hire contract and temporary employees.

Hudson New Zealand Executive General Manager Marc Burrage said the contract and temporary results were encouraging because they indicated more permanent appointments would follow.

"In any recession there are certain lead indicators, and from a labour market perspective the lead indicator that suggests things are starting to pick up is the demand for contracting staff. So having seen that, that is cause for optimism."

Burrage said the trend towards hiring temps and contractors usually lasted about six months before companies felt confident enough to hire permanent staff.