Cautious hopes for jobs reflect muted recovery

ROB O'NEILL
Last updated 05:00 16/01/2011

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Employment specialists are couching their forecasts with extra notes of caution following an unexpected 2% dip in GDP.

Marc Burrage, executive general manager of recruitment firm Hudson, said that although his company's research for the first quarter of 2011 reveals the greatest willingness for firms to hire since 2008 – one in four say they are looking for new permanent employees – the economy is still subdued and recovery from the recession is shallow.

Burrage said demand for full-time staff in larger New Zealand businesses is continuing to increase, however, bringing hope to the jobless, and has risen 1.8% over the past year.

Chris Riley, general manager of Manpower New Zealand, found the direction of the employment market hard to read throughout 2010 with sentiment swinging every month, and different sectors taking turns to drive optimism.

In the September quarter it was banking and finance showing strength, while the December quarter it was the services sector, Riley said.

"This year we are thinking more of the same. We're not seeing any consistency at all," he said, but added: "We see cautious optimism, not wholesale negativity."

Studies of employment sentiment, from both the public and private sectors, record what looks like a "V-shaped" recovery, with a sharp 2009 dip followed by an equally sharp lift. However, that lift has not reached the heights experienced before the recession of 2007 and 2008, and the data available is a moving feast.

The Department of Labour's November "Leading Indicator of Employment" study forecasts employment growth of between 0.5% and 1% per quarter – but that was before the latest dip in GDP. Optimism has also come from a life in job listings on TradeMe.

A National Bank "Business Outlook" paper from December, in contrast, said the recovery in business confidence experienced in late 2009 had halted.

"Respondents still appear to be taking a wait and see attitude before committing cold hard cash to capex," it said. "They've waited and waited, and are still not sure what they see."

Factors holding back commitment to capital expenditure and employment include the weather, earthquakes, weakening land and home values and a continuing push to strengthen company balance sheets.

Similarly, the Employers and Manufacturers Association found in December that employment sentiment was up, but the outlook was "tinged with a lot of uncertainty".

Both Burrage and Riley point to information technology and other areas of specialist skill such as accountancy and engineering as sectors looking for experienced staff.

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Likewise in engineering, construction and mining, demand is solid for specialist engineers, skilled tradespeople and experienced labour, Riley said.

Geographically, demand for workers is strong in Christchurch and Auckland, he said.

The Christchurch earthquake has boosted demand for skilled tradespeople, with some firms signing people up en masse on two- and three-year fixed contracts.

Riley is also seeing demand for procurement specialists in government and around the periphery of government as the search for spending efficiencies continues.

It is also building in areas such as warehousing and logistics.

Although Riley said he is seeing equal growth in demand for temporary and permanent staff, Burrage said the call for permanent staff seems stronger, indicating some larger organisations had cut too deep during the downturn.

Sentiment in government had improved after three consecutive quarters of decline. Burrage predicts demand for workers will become stronger towards the end of 2011, but already some private sector organisations are seeing an opportunity to build market share and emerge from the downturn.

- Sunday Star Times

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