Minister confident job target will be met

Economic Development Minister Steven Joyce. Photo / APN

Cumulative growth of 27,000 positions lags well behind the 92,000 forecast in the Government's 2011 Budget.

Progress has been slow but Economic Development Minister Steven Joyce is sticking to Finance Minister Bill English's Budget 2011 promise that the Government can add 170,000 new jobs to the economy by 2015.

The Government got some welcome news last week with data showing the unemployment rate had fallen to a three-year low of 6.2 per cent.

But looking more closely at the numbers, there is reason for the optimism to be cautious.

The Household Labour Force Survey is a notoriously volatile measure and just a few months ago put the unemployment rate at 7.3 per cent - a 13-year high.

The survey also showed there were just 8000 jobs added to the economy in the past year, that's well down on the 57,000 forecast for the period when Mr English made his 2011 pledge and even down on the revised number of 33,000 published with last year's Budget.

To date, cumulative job growth of 27,000 is lagging well behind the 92,000 forecast in the 2011 Budget and even the 49,000 forecast in 2012.

Nevertheless, Mr Joyce says, "Overall I think we're making reasonable progress."

He said that over the past two years 54,000 jobs had been added according to the Quarterly Employment Survey - a survey of firms - or 30,000 according to the Household Labour Force Survey.

"We're not there yet by any manner or means but we're picking up and the progress is positive but we've got more work to do."

Mr Joyce pointed to the respectable economic growth of 3 per cent recorded last year, saying "employment tends to lag that a little bit".

He expected the pace of job growth to play catch-up with the GDP growth over coming months.

"Historically as you start to grow out of a recession that's what happens."

He puts the failure to add jobs at the pace forecast in 2011 down partly to the fact the rebuilding of Christchurch has taken longer to get underway than expected.

However construction would be a significant source of employment growth beyond Christchurch.

"It's also Auckland because we are seeing a pick-up now in housing and we will see a further pick-up in terms of the announcements that have been made [to fast-track land release] this week."

Mr Joyce also picks food processing and manufacturing as key area for jobs growth with international investments now coming through, including the $250 million Yili baby formula plant in South Canterbury generating several hundred jobs in the construction phase as well as permanent jobs when the plant is operating.

Similar projects include the Yashili milk plant in Pokeno and the smaller Proline plant in Palmerston North, "and I think you're going to see more in that space".

He also picks the oil and gas sector as a growth area with 350 jobs coming from the Marsden Pt refinery expansion due to start late this year and what is shaping up to be one of the biggest summers for many years in oil and gas exploration coming up next summer.

Mr Joyce also expects jobs to come from large infrastructure projects such as the Kapiti expressway north of Wellington.