The unemployment rate in the wider Manawatu region is back up to 7.7 per cent as migrants swamp the job market.
Statistics New Zealand's Household Labour Force Survey for the March quarter, released yesterday, shows a 35 per cent increase in the rate of unemployment in the Manawatu-Whanganui region in three months.
That could mostly be explained by the volatility of the data which had thrown an "anomaly" into the mix for Manawatu in the December quarter, said Palmerston North City Council economic policy adviser Peter Crawford.
A total of 6700 people were estimated to be unemployed in the region in December, but in March that number had reached 9200.
Nationally, unemployment remained at 6 per cent.
One possible reason for the region's jobless rise was the increase in people settling in the city. More people had arrived to live in the city than left in recent months.
"The number of people that are employed hasn't really changed," Crawford said. "There's probably more people finding jobs but because there's more people around it's harder for people to find a job."
The unemployment rate was unlikely to drop below the national average any time soon, he said.
"We would like to be lower than the national average in Manawatu but we have always tended to be higher," Crawford said.
"The regions have had a long period of significant manufacturing closures and when someone becomes unemployed they are less likely to leave because Manawatu is not an expensive place to live unlike Auckland or Wellington."
The Government's announcement that it will give $3000 to help unemployed people with a confirmed Christchurch job to move to help with the rebuild could be attractive to the unemployed in the region, Crawford said.
"We've got a really strong connection with Christchurch through the airport, there's more connections between Palmerston North and Christchurch than Hamilton, and for people in slightly more deprived areas like Levin that could be a serious option for them.
"I think some of them will take advantage of it and it will be interesting to see just how many."
Start Youth Transition Service manager Peter Butler said there had not been any noticeable increase in the number of people seeking work in the city. What was noticeable was the scarcity of low-skilled jobs available, particularly for youth.
"It's a real struggle for those people because it's a chicken and egg situation for them."
New Zealand-wide there were 2.3 million people in work in the March quarter, up 0.9 per cent in the three-month period and 3.7 per cent on the past year.
"We're seeing more people in the labour market, with the participation rate surpassing the previous high in late 2008 before the downturn in the labour market," said Statistics NZ labour market and households statistics manager Diane Ramsay.
"The rise in participation is on the back of more people in work, while the number of people looking for work remains unchanged.
"Employment continues to rise, with growth seen across a number of regions, industries, and demographics," Ramsay said.
- Manawatu Standard
If you had a choice, which would you prefer on Christmas day?Related story: Sun takes a Christmas holiday