4:15 AM Thursday Apr 10, 2014
Total of 48,000 new positions created in Auckland last year but economist warns blue-collar areas hard hit.
Auckland’s economic growth had become increasingly broad-based. Photo / Dean Purcell
Auckland’s unemployment rate has dropped to its lowest level in six years, buoyed by economic growth and the associated demand for workers to the point where 48,000 new jobs were created in the city last year.
Geoff Cooper, Auckland Council’s chief economist, said the unemployment rate was 6.3 per cent in the December quarter and 760,000 Aucklanders were in either full or part-time work in the city of 1.4 million people. Residential construction was driving job growth in building, real estate agencies, rental services, manufacturing, finance and insurance services, he said.
“The Auckland economy gained momentum over the second half of 2013 and has entered 2014 on a strong footing, with the unemployment rate at its lowest level since 2008, annual net migration levels at their highest levels in 10 years and both consumer and business confidence riding high,” he said.
Auckland’s economic growth had become increasingly broad-based and the upswing in housing construction was having significant flow-on effects to other sectors, particularly manufacturing.
Consumer spending had gained momentum, Auckland was enjoying strong visitor numbers and dairy prices, and had proved resilient in the face of a high New Zealand dollar and weakening Australian economy, he said.
“Businesses have been taking on additional labour to cater for projected demand, but the outlook for employment growth is very much dependent on the strength of domestic activity, particularly housing activity and consumer spending,” Cooper said.
But wages are not shooting up.
“Wage pressures remain contained, average weekly earnings growth for full-time-equivalent employees moderated from 3.7 to 3.3 per cent, largely reflecting compositional effects – annual growth in the labour cost index, which takes into account changes in industry and occupation shares, was unchanged at 1.7 per cent,” he said.
Job growth should continue this year.
“The outlook is for solid employment growth and a further decline in the unemployment rate through 2014 back towards 5 per cent.
“However, there are plenty of upside and downside risks to this outlook, both domestic and external,” he said.
Cooper’s Auckland Economic Quarterly found Reserve Bank LVR limits had constrained housing demand. “Their effect will be compounded by rising interest rates through 2014. However, demand is currently being bolstered by exceptionally high levels of net migration, which together with rising household incomes will help cushion house price growth,” he said.
Shamubeel Eaqub, NZIER principal economist, said Auckland was extremely divided on income, and success was not evenly shared.
“While the median household income is $107,900 in the Upper Harbour local board area, it is less than half in Mangere-Otahuhu at $59,900,” Eaqub said, adding there are fewer blue-collar jobs.
“This has been hard on places like Mangere, Otahuhu, Otara, Papatoetoe and Manurewa where there has been little or no growth in jobs over the last seven years, even though Auckland as a region is doing much better.”
Source : The New Zealand Herald