Unemployment to hit 4％ by 2021, says MBIE
Job growth and higher retirement rates over the next eight years are predicted to push unemployment as low as 4 percent by 2021, says new forecasts from the Ministry of Business, Innovation and Employment.
The Medium-Long Term Employment Outlook expects slightly faster growth in the near term, with total new jobs created between 2011 and 2016 projected to grow by 180,300, followed by a further 174,500 jobs through to 2021.
"This represents employment growth of about 1.6 percent per year (or 36,000 on average) and about 1.4 percent per year (or about 34,900 on average) respectively," the forecast documents say.
This assumes the economy will average 2.7 percent annual growth from 2011 to 2016, and 3 percent a year through to 2021. The lower employment growth in the faster-growing latter period is attributed to an ageing workforce and the forecasts assume productivity gains will make up for the fact there are fewer new workers entering the workforce as the national population ages.
"Higher labour supply costs and increased capital investment are expected to contribute to annual productivity growth, rising by more than one-third from 2016 to 2021, compared with the previous five years."
The greatest growth is expected to be at either end of the skills scale, with comparatively fewer semi-skilled jobs coming through.
"Strong employment growth is expected in the primary sector, primary processing, certain manufacturing industries such as machinery and equipment, metal products and in construction-related activities," the MBIE report says.
Service industries, including health, cultural and personal services, would grow strongly, with the greatest new demand for highly skilled workers, including managers and professionals. Of the 354,800 jobs forecast to be created during the decade to 2021, nearly half (149,900) are expected to be highly skilled.
"The unemployment rate (currently 6.2 percent of the workforce) over the projection period is expected to trend down to 4.8 percent by 2016 and 4 percent by 2021. Increasing labour supply constraints from an ageing population underpin this outlook," says MBIE, which expects high labour participation rates to sag as the growing pool of older workers start to wind back their hours or leave the workforce.
Between 2011 and 2016, skilled trades workers and building labourers would be in demand because of the Christchurch rebuild, which is expected to extend beyond 2016.