Source: Employers and Manufacturers Association (EMA)
The increase in unemployment, as well as the increased proportion of young New Zealanders not in employment, education or training (NEETs), reflects continued hesitancy among businesses, especially around hiring, says the EMA.
Figures released today by Stats NZ show the unemployment rate rose to 5.7% in the September quarter, from 5.6% in the June quarter. The seasonally adjusted proportion of 15 to 24-year-olds who were NEETs also increased, from 13.8% in the June quarter to 14.1% in the September quarter.
EMA Head of Advocacy and Strategy Alan McDonald says the rise in unemployment was a surprise, given it had been widely expected to remain stable.
“A 0.1 percentage point movement may appear small, but it represents roughly another 3,000 people unemployed and shows the labour market has not yet turned the corner,” says McDonald.
“We are seeing signs of economic recovery, underpinned by strong exports and improving activity in manufacturing, residential construction and tourism. However, the recovery remains brittle, and businesses are still assessing whether stronger demand will last before committing to permanent hires.”
McDonald says the greater use of casual workers and fixed-term contracts reflects the caution employers are showing in the current environment.
“Businesses still need people to fill immediate gaps, but many are not yet ready to take on the longer-term commitment of additional permanent staff. Casual and fixed-term arrangements give them flexibility while they assess the market and the impact of pressures such as higher fuel costs and wider international uncertainty.”
He says the rise in the NEET rate is also concerning because New Zealand cannot afford to have more young people disconnected from employment, education or training.
“Employers regularly tell us that work readiness is one of their biggest recruitment concerns. At the same time, more young people are becoming disconnected from the pathways that could help them build the skills, experience and confidence needed to enter the workplace.”
“The goal cannot simply be to move young people into any available activity. Education and training need to provide genuine pathways into sustainable employment and equip people with the skills businesses need.”
McDonald says employers want stability and clear direction on the major issues affecting investment and hiring, including education, infrastructure and the wider policy environment.
“Confidence is critical. Businesses need a stable environment and greater certainty that the recovery will endure before they invest and hire.
“That requires employers, training providers and government agencies to work much more closely together to connect people with the opportunities businesses are able to create.”