Alan McDonald: Employers and Manufacturers Association Advocacy Head on the unemployment rate dipping to 5.3% in the March quarter

Employers are remaining cautious as the Iran war continues to push up fuel prices and slow economic growth. 

Unemployment dipped slightly to 5.3% in the March quarter. 

Employers and Manufacturers Association Advocacy Head Alan McDonald says businesses he's talked to aren't yet looking to shed staff. 

He told Mike Hosking that they can see it’s going to get better when the conflict ends, and they want those good people around to help the business get going again. 

Auckland, Wellington, and Canterbury, are all facing a rising unemployment rate, and it’s surging in Bay of Plenty. 

Auckland's rate climbed again to 6.6% and in Bay of Plenty it skyrocketed to 7.1%. 

McDonald says both regions rely more on industries doing it tough, but those industries also tend to soak up more employees when they're doing well. 

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Episode Transcript

Speaker 1 (00:00):
Last half full the unemployment rate was to the upside,
given known was forecasting a drop as far as I
know from fire point four to five point three, the
underutilization rate steady, wage growth, of course a bit meager.
The cities are the issue. Allen McDonald is EMA's head
of advocacy and strategy and he's back with us Ellen
Morning Morning, Mike. So what was your read on seeing
fire point three? Is that good news or bad news?

Speaker 2 (00:19):
Well? I think it was a little bit of a
surprise that had gone down. I don't think anyone was
predicting that, and I think, unfortunately, it's going to go
back up and we'll get a more accurate picture when
Treasury announced their figures around the budget at the end
of the month. I think that's what I'll give us
the accurate picture.

Speaker 1 (00:34):
Do you know? I reckon people are more robust than off,
And the forecasters say, because I mean, to lay somebody
off is a big deal, and you don't want to
and you can see through the war, or at least
some people can, so you'll be hanging on, won't you.

Speaker 2 (00:47):
Yeah, I think there's a bit of that going on, Mike.
I think a lot of people through COVID unfortunately realized
just the value of good staff. So at the moment, yes,
things are a bit nasty so fuel crisis and they're
round conflict, but they're doing their best to hang on
to people as long as they can because they do
see that it's going to get better when the conflict ends,

(01:09):
and they want those good people around to help the
business get going again.

Speaker 1 (01:12):
Yeah. Now the glass half empty problem as Wellington, Auckland
or urban New Zealand. So do you see Wellington and
Auckland as the same story or as Wellington's story in itself?

Speaker 2 (01:22):
I think that's separate. Auckland, of course, is probably the
well there's the biggest manufacturing center in the country and
manufacturing and construction are two of the sectors that have
slowed noticeably with the fuel crisis. Wellington's a different story.
It's more I guess civil service orientated than while the
streets aren't lined with home and civil servants, they have
been tightening things up along the government's spend. So that's

(01:46):
I think it's a separate story.

Speaker 1 (01:47):
How worried should we be about Auckland to growth? You know,
whether you like Auckland or not, it's a growth engine.
Of the economy full stop, and it's six been high sixers.
Now that's an issue, isn't.

Speaker 2 (01:56):
It It certainly, And Auckland I think is contray. It's
about thirty three thirty four percent of GDP. The other
concern in there is that one of the pockets of
very very high youth unemployment that are fifteen to twenty
four is Auckland and there are parts of Auckland where
that's well into the twenty percentage. And that's a problem worldwide,
but it's a particular problem in two or three hot

(02:18):
spots around the country.

Speaker 1 (02:20):
What do we do about it?

Speaker 2 (02:22):
Well, unfortunately, it's the sectors that tend to soak up
those people that are in having a bit of trouble
at the moment. So that's distribution, that's manufacturing, and that's construction,
and a bit of retail as well. So when they recover,
I think you'll start to see those going on. But
also there's a shift in the trends for hiring that
we've seen. So those NEAT numbers have been rising steadily

(02:43):
for about six or seven years now. When the current
government came in, they were in twelves. Now it's at
fourteen and a half, so those young people aren't getting
picked up out of the schools and politechs and universities.
There's a post COVID bubble that worries employers that they
just not work ready. And there's another trend with the
very high and rapid shifts in the minimum wage. Employers

(03:06):
are looking to people with one or two years of
proven experience in the workplace, paying them a dollar or
two or more an hour, rather than looking to those
young people coming in.

Speaker 1 (03:15):
Interesting insight. All right, Allen, appreciate it as always. Ellen
McDonald Limay's head of advocacy and strategy.

Speaker 2 (03:20):
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