The economy will gain nearly 94,000 jobs over the next two years as employment growth accelerates, the Department of Labour says.

It released the forecasts, which it says will inform its advice on welfare reform, yesterday.

"Employment growth will be strongest in the Auckland region, driven by growth in wholesale and retail trade, transport and storage, and business services - which are employment-intensive industries - and in the Canterbury region, mainly in construction-related activities."

The construction and utilities sectors are expected to provide more that a quarter of the new jobs in the year ahead, and nearly half the following year, as the rebuilding of Christchurch gathers pace.


The Labour Department's modelling predicts employment will have grown by 24,400, or 1.1 per cent, in the year to March 2012.

However, the results for three quarters of that year are already in, during which the economy added just 10,000 jobs. To add more than 14,000 in one quarter is not unheard-of, but it would be unusual.

Its forecast for employment growth in the year ahead, 1.8 per cent or 39,600 jobs, is in line with the consensus among economic forecasters, but the increase for the following year, 2.4 per cent or 54,100 jobs, is above consensus (2.1 per cent).

That may reflect the fact that the Labour Department's modelling draws on the latest macro-economic forecasts of the Treasury and Reserve Bank. The Treasury's pick for economic grown in the year to March 2014 at 3.8 per cent is more optimistic than the consensus, which is 3.2 per cent.

The department notes that the employment growth it is forecasting is still well below the rates prevailing before the recession. It adds that employment growth does not include the job opportunities which will arise as older workers retire. It estimates this "retirement demand" at about 50,000 jobs a year over the coming years.

Offsetting that is the fact that the labour force also continues to grow, by 24,000 a year under Statistics New Zealand's central projections.

There were 150,000 people unemployed at the end of 2011.