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Auckland city business and economy report 2008

Executive summary | Past economic performance | Relative international economic performance | Economic structure | Population | Labour market | Retail trade and tourism | Building and property | Inflation, interest rates and the exchange rate | Focus on manufacturing | Focus on Rosebank 2030 | Economic outlook | Auckland city in figures | Download the report

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Labour market

Employment growth has declined over the past few years. Unemployment has risen, although remains well below levels experienced in the late 1990s. The labour market remains tight but has eased since 2005. Auckland city wages have grown faster than and are above those of New Zealand over the year to March 2008.

Employment growth in Auckland city has been trending downwards over the past few years, falling from an average annual growth of 2.7 per cent in March 2006 to 1.2 per cent in March 2007 and -0.5 per cent in March 2008.

Unemployment has been rising over the past few years as growth in the labour force has been exceeding growth in employment. Unemployment in Auckland city rose to an average annual rate of 4.2 per cent in March 2008, from 3.8 per cent in March 2007. This is similar to levels experienced in 2004 and is an increase from a record low of 3.1 per cent in March 2006.

Auckland city's unemployment rate was above the regional annual average rate (3.8 per cent) and national annual average rate (3.6 per cent) in March 2008. The region and nation have experienced slight declines in their unemployment rates since March 2007 and all are well below unemployment rates in the late 1990s.

Although unemployment in the city has risen slightly, the labour market remains tight. The graph on the following page shows whether firms are finding it easier or harder to find labour than three months ago. Firms in the city still experience difficulty finding both skilled and unskilled labour. However, labour shortages have improved since 2005, with a substantial easing within the last quarter.

Unemployment rates Annual average

Source: Statistics New Zealand.

Skill shortages in Auckland city

Source: New Zealand Institute of Economic Research (Quarterly Survey of Business Opinion) - net percentage of respondents is calculated by subtracting the percentage of respondents saying 'harder' from the percentage that say 'easier'.

At an average of $1020 per week, Auckland city wages are higher than the rest of the country ($904 per week). The city also experienced stronger wage growth of 5.9 per cent in the year to March 2008, compared to 4.2 per cent for the country.

Wage growth is expected to slow over the coming year as the labour market eases and the economy weakens.

Auckland city wage growth

March 2008 quarter¹²

	Auckland city	New Zealand
Total average weekly earnings	$1,020	$904
Annual growth	5.9%	4.2%

Source: Statistics New Zealand, Quarterly Employment Survey.

¹² Auckland region wage data was not available.

Published August 2008