Labour Market Trends and Outlook

Abstract

Given New Zealand's recent robust economic performance, 3.6% per annum on average since 1999, the strong improvement in a wide array of la hour market indicators has not been surprising. What has surprised many economic commentators has been the continued strength of the labour market in the face of the recent slowing economic activity.

The ability of the economy to make use of its labour capacity may have improved suggesting a fall in New Zealand's non-accelerating inflation rate of unemployment (NAIRU).

With labour utilisation now stretched to the limit if we want to maintain economic growth at levels we have become accustomed to, we will need to substantially lift the level of labour productivity growth in the coming years. However making the transition to a more productive economy while maintaining the gains we have achieved in labour utilisation will not be an easy task.