New Zealand's labour market reaches a turning point

The number of school leavers in New Zealand is declining. Coupled with an ageing workforce, this means New Zealand employers are going to increasingly struggle to find trained individuals for their job openings. 

Infometrics estimate that the number of school leavers will fall in 2015 by about 13%. While the number of young people entering the workforce is in decline, the number of people almost at retirement age is on the increase. A decade ago about 8% of our workforce was aged 60 or above. Today that figure is approaching 15%.

The construction sector offers a case study into how tough these trends are going to make recruitment in the future. The construction industry has been growing strongly over the past couple of years mainly due to the rebuild in Canterbury. As the rebuild winds down, Auckland will take over as the major creator of construction jobs. This trend will sustain high levels of building activity for quite a few years to come.

As a consequence of the growth in the construction industry, Infometrics estimates that the employment of construction trades workers will grow by more than 5% on average each year for the next 5 years. Like most occupations and industries, the construction trade workforce is rapidly ageing and more than 4% of the workforce will need to be replaced each year as people retire or move into management or other roles.

If we put these two factors together it means that for every 100 construction trades workers employed in 2014, the industry will need to find 50 new trades workers during the following 5 years.

This is a huge challenge for the industry at a time when the supply of new entrants onto the labour market is slowing and the Australian economy is picking up and will start luring our workers with bigger pay packages. The construction sector is probably an extreme example, but all industries are in it together and will need to compete with each other for the valuable school leavers.

Industries and regions need to be prepared for the reality of the New Zealand labour market. They need to look at the training pipeline and consider the types of qualifications that are being created and compare this with future needs. An awareness of where the skill gaps are going to be will help inform future strategies and investment.

More Research

The cost of youth disengagement

  • 4 November 2015

Youth disengagement is one of the catch-phrases of this century. What's being done to help curb this in our communities?

MBIE releases report on migrant workers

  • 11 September 2015

The Ministry of Business, Employment and Innovation (MBIE) has recently released a report (July 2015) on the exploitation of migrant workers involved in the Canterbury rebuild.

See all Research