SKILLS MAPPING REPORT – New Zealand
Stuart King
Senior Analyst, Labour Market and Business Performance
Ministry of Business, Innovation and Employment
Executive summary
New Zealand’s economy is expected to continue to recover, driving increased employment. The
impact of natural disasters (earthquakes in 2010 and 2011 and drought in 2012-13) will have a
significant impact on the scale and form of future growth.
The overall quality of labour supply remains strong, with high levels of education attainment in the
working-age population. However, there are still disparities in educational achievement, with much
of it ethnically based.
1. Overview of economic and demographic trends affecting employment
New Zealand’s economy is still recovering from recession, although the outlook is becoming
brighter. Prices for exports remain high, businesses are increasingly more confident, and the
economy is expected to expand over the coming years. This economic expansion is expected to
generate employment growth.
The rebuilding of the Canterbury region following major earthquakes in 2010 and 2011 is expected
to have a significant impact on employment growth in the short-term. Reconstruction will likely
drive strong growth in the construction and utilities industries, and strong demand for skilled trades
workers.
Over the longer-term, broader demographic trends are expected to affect employment growth,
most prominently an increasingly ageing population. This ageing population is likely to lead to
declining labour force participation rates and an increase in the average age of those remaining in
the labour force.
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2.
Current data collections
2.1
Main data collections
Collection
name
Household
Labour Force
Survey
Frequency with
which data
collection takes
place
Quarterly
First year for
which data
are available
How often
results are
published
How data can be obtained
1986
Quarterly
http://www.stats.govt.nz/browse_for
_stats/income-andwork/employment_and_unemployme
nt/household-labour-force-surveyinfo-releases.aspx
Main variables collected
-
Labour force status: by sex, age, ethnicity,
and region
Employment by industry
Employment by full and part-time status.
Hours worked
Joblessness
Underemployment
Household composition by labour force
status
Labour force and education status of 1524 year olds
The full list of variables is available from Statistics
New Zealand at:
http://www2.stats.govt.nz/domino/external/omn
i/omni.nsf/outputs/Household+Labour+Force+Sur
vey
Quarterly
Employment
Survey
Quarterly
1989
Quarterly
http://stats.govt.nz/browse_for_stats
/income-andwork/employment_and_unemployme
nt/quarterly-employment-survey-inforeleases.aspx
-
Filled jobs
Average ordinary earnings- hourly and
weekly by sex, industry and region
Average overtime earnings- hourly and
weekly by sex, industry and region
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The full list of variables is available from Statistics
New Zealand at:
http://www2.stats.govt.nz/domino/external/omn
i/omni.nsf/outputs/Quarterly+Employment+Surv
ey
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2.2
Method for identifying shortages and surpluses of labour and qualified workers
The Ministry of Business, Innovation and Employment does not identify surpluses of labour.
Skills shortages are identified for an Immediate Skill Shortage List, a Long Term Skill Shortage List and
a Canterbury Skill Shortage List. These are reviewed annually. The process for placing an occupation
on the skills shortage starts with an occupation nomination procedure, through which industry
stakeholders – for example employers’ groups, trade unions and industry training bodies – are
invited to submit proposals for an occupation to be included, removed or moved between lists. This
is followed by the preparation and publication of Preliminary Indicator Evidence Reports that draw
together and assess relevant data for each of the occupations under review and provide the
Ministry’s preliminary view on the status of the occupation. Finally, there is a submission process,
through which industry stakeholders are invited to provide additional information and evidence
about the nature and extent of skill shortages in the occupations under review.
Before a new occupation is added to one of the lists, the following criteria must be met:
 Industry is committed to training New Zealanders in these occupations.
 Industry is committed to fully utilising the domestic labour market before considering
employing overseas workers.
 The shortage is not due to recruitment and retention issues arising as a result of terms and
conditions of employment.
 Industry is committed to the provisions in New Zealand employment legislation that is
available to workers.
 There is evidence of employers having difficulty employing staff.
 The numbers of apprentice or graduate trainees, and workers leaving or retiring from the
industry have been estimated.
 Details of the qualification and skills required for the occupation have been confirmed.
 The shortage is not employer specific.
 There is a significant shortage for the occupation that may reasonably be met by migrants.
In addition to the above criteria, there are specific requirements related to each list.
For an occupation to be added to the Long-term Skill Shortage List:
 There must be an on-going and sustained (absolute) shortage, both globally and in New
Zealand.
 The shortage must be across all geographic regions in New Zealand.
 The occupation must have a base salary of at least NZ$45,000 based on a 40-hour working
week.
 The occupation must be highly skilled, meet the Skilled Migrant Category definition of skilled
employment, and applicants must meet any registration requirements.
For an occupation to be added to the Immediate Skill Shortage List, it must:
 Require highly skilled workers.
 Have an obvious shortage of workers in one or more geographic regions.
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For an occupation to be added to the Canterbury Skill Shortage List, it must:
 Require highly skilled workers.
 Have an obvious shortage of workers in Canterbury.
2.3
Method for projecting future employment
Methodology used to develop the projections
The Ministry’s forecasts are generated using a number of different data sources on employment and the latest
Census data to incorporate more recent occupational changes. The analysis is carried out using industry level
GDP growth, labour productivity estimates and occupational composition changes, as appropriate.
Key steps involved in industry and occupational employment forecasting are:




Using econometric and general equilibrium model outputs of industry level GDP forecasts in New Zealand
Deriving industry employment forecasts using GDP forecasts and productivity by industries
Projecting future occupational shares by industries or sectors using changes in census shares
Deriving employment levels by occupations across industries.
Industry GDP
forecast
Productivity
assumption
Industry
employment
forecast
Occupational
shares of
industry
employment
Occupational
forecast
Time period covered by projections
Employment projections are carried out twice a year for the short-term (the next 2-3 years) and once a year for
the medium-longer term (the next 5-10 years).
Industries and occupations covered by the projections
Industry employment figures are prepared at an aggregated 1-2 digit ANZSIC96 level for 28
industries.
Occupational forecast figures are prepared at the 3 digit NZSCO level for 96 occupations.
3.
Current labour market conditions
3.1
Recent trends in educational attainment of the population
The educational attainment of the New Zealand population is high by international standards, and
continues to increase.
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The proportion of the New Zealand population aged 15-64 with a degree or higher almost doubled
between 1997 and 2007, from 11.7 to 22.5 per cent.
Students are leaving secondary school more qualified. The proportion of school leavers with
qualifications suitable for university entrance has increased from 28.7 per cent in 2004 to 45.4 per
cent in 2011. However, there are still considerable ethnic differences in secondary school
achievement, with Māori and Pacific students significantly less likely to receive university entrance
qualification compared with the rest of the population.
Younger people are becoming more tertiary-qualified. The proportion of New Zealanders aged 25 to
34 years with a bachelors or higher qualification has nearly doubled in the past decade, reaching 30
per cent in 2011.
The increase in the proportion of younger New Zealanders with a bachelors or higher qualification
reflects very significant increases in access to higher levels of tertiary education from the 1990s.
Also, just under 40 per cent of this age group held other tertiary qualifications in 2011. This means
that those with no or a lower-level qualification have decreased considerably, for this age group,
over the last 10 years.
3.2
Recent trends in employment by occupation
The occupational group showing the strongest growth in recent years is professionals. An additional
157,000 professionals were employed in 2012 compared to 2004, an increase of 44%. During this
same period, employment across all occupational groups increased by 191,000.
Two occupational groupings recorded declines in employment over the period 2004-12. The number
of labourers employed dropped by 19,000 (a 7% decline) and the number of clerical and
administrative workers employed dropped by 10,000 (a 4% decline).
3.3
Recent trends in employment by industry
Over the past four years, employment in the construction, manufacturing, wholesale and retail trade
sectors has contracted. Limited investment in the capital and residential stocks since the recession,
along with a challenging exchange rate, has led to difficulty in the construction and manufacturing
sectors.
3.4
Occupations and industries which are currently experiencing a shortage of suitable
workers
Lists of industries which have been identified as having a shortage of suitable workers can be found
here:
http://www.immigration.govt.nz/migrant/stream/work/skilledmigrant/LinkAdministration/ToolboxL
inks/essentialskills.htm?level=3
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3.5
Occupations and industries which are currently experiencing a surplus of suitable workers
Data on labour surpluses are not collected.
3.6
Recent trends in the employment of people with different levels of educational
attainment
As with most other countries, higher levels of education are associated with increased employmentthe most recent data (for the March 2013 quarter) shows the employment rate for those with a
post-school and school qualification is 78.4%, while that for people with no qualification is 43.0%.
While people with no qualifications have higher unemployment rates than those with qualifications,
the gap has narrowed over the past two decades.
4.
Expected future labour market trends
4.1
Current expectations of future trends in employment in different industries
Over the longer term (to 2020), employment growth is expected to be strong in primary processing
activities and certain areas of other manufacturing such as machinery and equipment, and metal
product manufacturing. Employment in service industries such as the health and education sectors
are also expected to remain stable over this period.
In the short term (2013-14), high employment growth is expected in construction and related
activities (about 40% of employment growth is expected from this sector). Private sector services
will also account for substantial employment growth (about 32%). Following the peak employment
growth in construction in the next two years, private services will account for about 40% of the
employment growth during the year to March 2015.
Employment growth in private sector services is attributable to the high level of employment in this
sector rather than to the rate of growth. The rebuilding of Canterbury following the 2011
earthquake, and other significant projects across New Zealand, will drive the recovery in
construction.
4.2
Current expectations of future trends in employment in different occupations
Strong growth is expected over the long-term for the personal care workers occupational group,
which is projected to grow more at 3.0% during 2015-20 when additional older people needing such
care are expected, compared to 2.4% during the 2010-15 period.
In building and construction employment, strong growth is forecast in the longer-term for building
frame-related trades along with growth in demand for architects and engineers. There is also
demand for building and related workers.
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There is strong demand for business and computing professionals as well as for health and social
science professionals in both forecast periods. Amongst the associate professionals, some demand is
expected for those in health, finance, sales and social work.
4.3
Current expectations of the future demand for workers with different levels of educational
attainment
Employment growth is projected to be the strongest in highly skilled jobs: steady at 1.9% per annum
over the period 2010-2020, compared with overall employment growth of 1.6% (2010-15) and 1.3%
(2015-20) per annum.
Employment growth through this period is expected to be weakest for semi-skilled jobs (namely
clerical and some service and primary sector workers) at or below 1% per annum. The demand for
skilled and lower skilled workers is also projected to weaken over time but remain at about the
overall rate of employment growth.
The stronger demand for skilled (trades workers in particular) and elementary skilled workers (such
as building labourers) are nearly as high as for highly skilled workers during the 2010-15 March year
period. This is mainly attributed to the Canterbury rebuild and other construction activity across
New Zealand.
Opportunities for lower-skilled workers (that is, semi-skilled and elementary workers in total) are
expected to account for about 36% (or 62,000 workers) of total employment growth to 2015,
declining to 31% (or 48,400 workers) during the subsequent five years to 2020. The main industries
employing lower-skilled workers include food processing, retailing, accommodation and
construction. These industries also have particular importance for younger workers (15-24 year
olds). In 2011, approximately 19% of younger workers were employed in retail trade, 16% in
accommodation and food services, 10% in manufacturing and 7% in agriculture, forestry and fishing.
Conclusion
Overall, New Zealand is affected by many of the same issues that all developed nations are facing: an
uncertain economic recovery and an ageing population. There are unique challenges as well: the
continuing impact of the Canterbury earthquakes of 2010 and 2011 and the drought of 2012-13.
The earthquakes in particular, and the resultant need to rebuild the Canterbury region, will be one
of the major drivers of labour demand over the next three years.
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Useful websites and other references
For further information on labour market forecasting, research and analysis:
Ministry of Business, Innovation and Employment: Labour Market and Skills Research
http://www.dol.govt.nz/publications/lmr/
For further data on the educational attainment of New Zealand’s population:
Ministry of Education: Education Counts Database
http://www.educationcounts.govt.nz/
For further information on official statistics relevant to employment:
Statistics New Zealand
http://stats.govt.nz/
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