Post by Lux on Feb 4, 2009 20:32:48 GMT 12
By DAVID HARGREAVES - BusinessDay.co.nz | Wednesday, 04 February 2009
The number of out of work Kiwis is set to breach the 100,000 level for the first time in over six years when official employment figures are released tomorrow.
Economists are picking a likely unemployment rate of 4.7 per cent, up from 4.2 per cent in Statistics New Zealand's Householder Labour Force Survey for the December quarter. Based on the last available figures, that would produce an unemployment number of around 105,000.
The last time New Zealand had 100,000 people out of work was during the September quarter in 2002 as the country's unemployment rate was undergoing a series of steep falls on the back of extremely supportive economic conditions.
Now, however, the situation is reversing quickly and from a low point of 3.4 per cent and just 77,000 jobless at the end of 2007, economists are now predicting an unemployment rate of around 7 per cent by early next year.
All the recent pointers have suggested that tomorrow's figures, by the standards of recent years, will be bad as the country's businesses grapple with an economy that has been in recession for the whole of 2008 and a global outlook that appears to deteriorate by the day.
A third of Kiwi firms responding to the New Zealand Institute of Economic Research's December quarter survey of business opinion said they intended to cut staff numbers during the next three months. That was the highest figure in that survey since 1991, a year in which the rate of unemployment hit 10.7 per cent - its highest level in modern history.
Two employment-linked statistical releases from SNZ this week, the quarterly employment survey and Labour Cost Index, produced weaker figures than economists had expected. The total of paid working hours in this country last year fell by 1.4 per cent - the first time the figure had fallen since 1999.
Those latest figures from SNZ have led some economists to suggest that tomorrow's unemployment numbers might actually be worse than the 4.7 per cent rate the market is expecting.
"If there is to be a surprise it's more likely to be of a bigger drop, not a smaller one, BNZ senior markets economist Craig Ebert said.
As Ebert pointed out, however, a jobless rate with a four in front of it would be the envy of most other countries in the world at the moment.
"The US is expected to report a 7.5 per cent unemployment rate on Friday. The UK has recently risen to 6.1 per cent, while the Eurozone over the weekend reported a shift up to 8 per cent in December from 7.8 per cent.
"Nonetheless, the underlying dynamics in the New Zealand economy suggest we will give good chase to the unemployment rates to be experienced abroad. Global demand is going dead flat following its previous bubble, adding to the slowing sales from within New Zealand," Ebert said.
Over Christmas I heard of a few people being made redundant - but none of this recession business has hit me or mine yet - worrying times for many though.
The number of out of work Kiwis is set to breach the 100,000 level for the first time in over six years when official employment figures are released tomorrow.
Economists are picking a likely unemployment rate of 4.7 per cent, up from 4.2 per cent in Statistics New Zealand's Householder Labour Force Survey for the December quarter. Based on the last available figures, that would produce an unemployment number of around 105,000.
The last time New Zealand had 100,000 people out of work was during the September quarter in 2002 as the country's unemployment rate was undergoing a series of steep falls on the back of extremely supportive economic conditions.
Now, however, the situation is reversing quickly and from a low point of 3.4 per cent and just 77,000 jobless at the end of 2007, economists are now predicting an unemployment rate of around 7 per cent by early next year.
All the recent pointers have suggested that tomorrow's figures, by the standards of recent years, will be bad as the country's businesses grapple with an economy that has been in recession for the whole of 2008 and a global outlook that appears to deteriorate by the day.
A third of Kiwi firms responding to the New Zealand Institute of Economic Research's December quarter survey of business opinion said they intended to cut staff numbers during the next three months. That was the highest figure in that survey since 1991, a year in which the rate of unemployment hit 10.7 per cent - its highest level in modern history.
Two employment-linked statistical releases from SNZ this week, the quarterly employment survey and Labour Cost Index, produced weaker figures than economists had expected. The total of paid working hours in this country last year fell by 1.4 per cent - the first time the figure had fallen since 1999.
Those latest figures from SNZ have led some economists to suggest that tomorrow's unemployment numbers might actually be worse than the 4.7 per cent rate the market is expecting.
"If there is to be a surprise it's more likely to be of a bigger drop, not a smaller one, BNZ senior markets economist Craig Ebert said.
As Ebert pointed out, however, a jobless rate with a four in front of it would be the envy of most other countries in the world at the moment.
"The US is expected to report a 7.5 per cent unemployment rate on Friday. The UK has recently risen to 6.1 per cent, while the Eurozone over the weekend reported a shift up to 8 per cent in December from 7.8 per cent.
"Nonetheless, the underlying dynamics in the New Zealand economy suggest we will give good chase to the unemployment rates to be experienced abroad. Global demand is going dead flat following its previous bubble, adding to the slowing sales from within New Zealand," Ebert said.
Over Christmas I heard of a few people being made redundant - but none of this recession business has hit me or mine yet - worrying times for many though.