Tale of two cities: One booms, one slumps

16:00, Feb 07 2013

It's a study in contrasts, as Wellington unemployment hits an 18-year high, while the Christchurch rebuild creates a "money-go-round", with Canterbury unemployment hitting new low.


Joblessness in the capital is at an 18-year high, as Wellingtonians continue to struggle to find work.

Statistics New Zealand figures, taken from the household labour force survey, show there are 22,600 unemployed people in Wellington.

The number of people in work has fallen from 273,200 in September to 262,600 in December. The number of people not in the workforce - neither working nor looking for a job - has also risen.

Wellington regional unemployment rose to 7.9 per cent in the past quarter, from 7.1 per cent in the previous quarter. The national rate is 6.9 per cent.


Kelly Gordon, a design graduate with two diplomas, said he had been looking for a job for eight months.

"Everyone wants to do [design] and there are only so many [jobs] out there," he said.

"I feel quite qualified in it; I've had multiple interviews. I've got one this afternoon, so I hope it goes well."

He was willing to look in other industries for work but worried about his lack of experience.

"Hospitality [has] that job market in Wellington, with a high turnover.

"But I've only done basic hospitality."

Newlands man Frank Leutogi, the security guard at the Work and Income office in central Wellington, sees jobless people every day.

Some applied for 50 jobs without success, he said - and now his own family has been hit by redundancy. His wife has just lost her job at a Newtown liquor store.

Their two children are old enough to work but earn low incomes, so Mr Leutogi will be the sole breadwinner.

"We relied on both of us to bring in money," he said. "I will try [to support the family]. I'm not on a high salary . . . but I'll try."

Federation of Family Budgeting Services chief executive Raewyn Fox said its 160 members were seeing an increase in middle-income families suddenly hit by financial hardship.

Families with both parents earning $40,000-$50,000 a year might see one lose their job and be unable to meet their commitments, she said.

"Often they're just over the level where they don't get any assistance from government or anywhere else.

"We didn't used to get any [using budget services] but now we're starting to get them. It's still only a small percentage but it is increasing."

Anecdotally, the period around last Christmas, moving into this month, was the busiest many of the services had ever seen, she said.

Upper Hutt Mayor Wayne Guppy said the city continued to be affected by Government cuts to the civil service.

However, he believed confidence was returning to the economy and this would flow on to jobs. Upper Hutt had started to see increased consents and building activity, he said.

Lower Hutt Mayor Ray Wallace said some long-established Hutt Valley businesses, such as the Goulds meat processing plant that closed in August last year, had been hit by the worldwide recession.

However, he felt there were developments in Lower Hutt that would bring in jobs, particularly the Technology Valley initiative, which encouraged investment in science and technology business in the area.


Canterbury unemployment has hit a new low in the period since the earthquakes began, and is expected to fall further.

The rebuild is creating a "money-go-round" in terms of spending - as quake work is paid for, money is spent in other sectors creating new jobs.

Unemployment fell to 4.9 per cent (unadjusted) in Canterbury for the December quarter, down from 5.2 per cent for the September quarter, according to Statistics New Zealand figures released yesterday.

It was down from 6.5 per cent in the June quarter.

At the national level, there was also a fall in unemployment to 6.9 per cent (seasonally adjusted) from 7.3 per cent in the September quarter.

There are now 16,900 people unemployed in Canterbury, down from 17,400 three months ago and down from 21,500 in the June 2012 quarter, a recent peak.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said unemployment would trend down, while the rebuild and economic activity ramped up. Eventually the jobless rate would get down towards the 3 per cent or "effective zero" level although that would be "somewhat compensated for" as people came into Christchurch for the rebuild.

People were starting to spend "big dollars" in the economy and that was resulting in a money-go-round as people were "fed, housed and watered . . . it's good to see we are in a situation where our population is above pre-earthquake levels and our total employment is above pre-earthquake levels".

The new jobs were due directly or indirectly to construction sector work, meaning the regional economy was starting to see a pickup in all sectors.

"Retail is certainly strong, and I would expect to get a lot stronger. The [retailers] we're talking to are stocking up because they can seen increasing demand," Townsend said.

Re:Start container mall director Paul Lonsdale said the retail sector was still obviously hampered by the demolition of the central business district. The rebuild would stimulate the regional economic activity and shelter Canterbury and the country from any continuation of the global financial downturn.

Christchurch & Canterbury Tourism chief executive Tim Hunter said jobs in the tourism and hospitality sector would emerge as major hotels opened in the city in 2013. But at the same time it was hard to find young people to work in such jobs because of the difficulty in finding rental accommodation here.

Simon Graham of recruitment agency Graham Consulting said employers looking for workers were saying it was becoming increasingly difficult to find the skills and talent they were looking for. The industry was saying there was high demand for skills right across most sectors.

"We're definitely getting a lot of interest from New Zealanders working in the UK and Australia, saying ‘Christchurch is looking like a pretty exciting place to work, what are the opportunities coming up?' "

Statistics NZ said the significant improvement in national unemployment to 6.9 per cent was because fewer people were looking for work and more people remained outside the labour market for purposes such as student study. Westpac senior economist Felix Delbruck said on a national level he thought the picture the household labour force survey showed was of a labour market that was "hardly rosy", but with a two-speed market given Canterbury's stronger showing.

"Eventually we'd expect high wages to attract more people to move to Canterbury. International migration to Canterbury has already turned positive."

The Dominion Post