Alan McDonald: Employers and Manufacturers Association Head of Advocacy on the unemployment rate rising to 5.6%

The Employers and Manufacturers Association says businesses are forging ahead despite a sluggish economy. 

The unemployment rate rose to 5.6% in June – the highest level in 11 years. 

Economists point to the war in Iran as one factor behind the rise, creating uncertainty and making businesses cautious about hiring. 

EMA Head of Advocacy Alan McDonald told Mike Hosking he’s hopeful we’ve reached the peak – there’s good things happening under the surface, so hopefully soon we can start turning the other way.  

He says there was quite a sharp dip in confidence when the Iran war began, but they’re seeing more people deciding they won’t hang around until circumstances get better, they’ll just get on with life. 

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Episode Transcript

Speaker 1 (00:00):
Job numbers to the upside headline figure five point six
under utilization rate up all and still a problem for
the whole country.

Speaker 2 (00:05):
Of course.

Speaker 1 (00:05):
Allen McDonald's EMA's head of Advocacy and Strategy and is
with us Ellen. Very good morning to you, morning Mike.
The participation rate, though, is up, so I'm seeing more
job adds up. I'm seeing the participation rate up. We've
got to be close to a tipping point where the
jobs actually soak up the demand.

Speaker 2 (00:22):
Yeah. I think there were a couple of other little
encouragement encouraging indicators in there too. The number of jobs
new jobs crowed was thirteen thousand, and we saw a
slight dip in the neats. That's those eighteen to twenty
four year olds not an employment or education, So that's
kind of positive. And I also think that hopefully now
we've reached the peak. I mean, this is where we

(00:44):
expected to get. Treasury were forecasting this probably twelve eighteen
months ago, and these numbers are always a lag indicator.
We know that underlying there's some good stuff going on,
So hopefully this is the peak and we can start
turning the other way.

Speaker 1 (00:57):
The psychology of what we're dealing with maybe this so
called war the strait that whatever carries on for a
period of time. How do we get over that hurdle
and get on with life.

Speaker 2 (01:08):
Well, I think what we're seeing and it was quite instructive.
I think there was quite a sharp dip when the
around war happened in confidence in those and intentions, and
then it popped back up fairly quickly as well, because
what we're seeing more of is people going I'm not
going to wait, I'm going to hang around till circumstances

(01:29):
get better. I'm just going to get on with life.

Speaker 1 (01:32):
How does the election play here? Are we a bit
nervous about the election and therefore hold off on decision
making round hiring.

Speaker 2 (01:39):
I'm not sure that's a bigger factor as we like
to think. And again I'll come back to that mentality. Look,
we're just going to get on with stuff.

Speaker 1 (01:47):
Does the North South thing bother you? It's three points
something percent in the south. It's a world away from
the North. I know, I know it's farmers and all that.
I get all that, but that's a gap.

Speaker 2 (01:59):
Well, anything close to three is almost effectively zero unemployment.
But you need the big engine of Auckland and the
cities really cranking as well to give that extra impetus
into the economy, and that's not happening. And there are
parts of Auckland where unemployment, particularly in those needs, is
twenty to twenty five percent, and that's no good for anybody.

Speaker 1 (02:19):
No, it's crazy. Although I feel a vibe in Auckland
that it's coming, right, Is that real or am I
out to lunch?

Speaker 2 (02:26):
I think there's a little bit of optimism around finally
seeing the end of all the road cones and the
road closures and things might be happening. And the other
thing that's happening is Auckland's a big engine of manufacturing.
And the manufacturing story is quite strong too. We just
haven't seen that reflected in some of those employment numbers
and that sort of thing. But manufacturing is probably the
untold story around the success of say the exporters as well,

(02:50):
because many many manufacturers are also exporters.

Speaker 1 (02:53):
Let us hope the better days. Ellen nice to talk
to Ellen McDonald, EMA's head of advocacy. It is Can
I just say briefly this, when we talk about the
fifteen sixteen year olds, the so called NEETs unemployed, we
should not in this country be registering fifteen year olds.
If you're a fifteen year old who's not in school
and not in training, there is no way in the
world you should be legally unemployed. I mean, that's just
a social and moral crime. So they shouldn't even be

(03:15):
in the numbers.

Speaker 2 (03:17):
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