Alan McDonald: Employers and Manufacturers Association Head of Advocacy and Strategy on the rising unemployment figures

There's been an increase in businesses asking for advice around redundancy and resizing is being seen by the Employers and Manufacturers Association. 

Stats NZ figures show the unemployment rate rose to 4.6% in the June quarter, up from 4.4% the previous.  

It's one factor the Reserve Bank considers when weighing up whether to cut the Official Cash Rate. 

The EMA's Alan McDonald told Ryan Bridge businesses are asking them the right way to downsize because they don't have the work for employees.  

He says he'd expected it to start heading the other way, but they just hit a record 163 calls in the month of July. 

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Episode Transcript

Speaker 1 (00:00):
Unemployment sitting at four point six percent for the June quarter.
That's a three year high, and it's an increase from
four point three percent from quarter one. It means basically,
thirty three thousand people who had jobs this time last
year are now out of work. But what a business
is on the ground seeing right now, because remember that's
old data by now, isn't it. The Employer Manufacturers Association

(00:21):
Alan McDonald's with me, Alan, good morning, Can I Ryan?
What are you seeing? How much worse are job cuts
going to get? In your view?

Speaker 2 (00:30):
Yeah, unfortunately, I think it's going to continue. We've been
seeing a steady increase in the numbers of businesses calling
out advice line, our helpline for our members to talk
about restructuring and redundancy, and I really had expected it
to start heading the other way, but we just hit
a record high in July of one hundred and sixty

(00:51):
three calls in a month.

Speaker 1 (00:52):
What are they asking you these businesses?

Speaker 2 (00:55):
It's basically how to go about the right way to
make people redundant or downsize their businesses because the business
simply isn't there and they haven't got the work for
those people.

Speaker 1 (01:08):
What sort of businesses are calling you. We're looking at
a whole bunch of method necks and taranaki. We're looking
at the pulp mills. Are recycling paper mill in Auckland
in the news in the last couple of days because
of energy costs, they're looking at getting rid of folks.
What are you seeing? What types of businesses?

Speaker 2 (01:25):
It's across the board. It's most of our members are
what you'd call smaller medium businesses, so smaller than probably
a hundred or fewer than one hundred employees, and all
parts of the economy, really manufacturing struggling quite badly at
the moment, but it's all sectors of the economy.

Speaker 1 (01:45):
Once adrien Or decides to start lowering rates, how much
longer will it take for you, guys, for your members
to feel it.

Speaker 2 (01:54):
Well, if the Reserve Bank does lower rates, it's likely
can only be zero point two five. I think it's
more about the signal than anything else. There are a
few green shoots out there, and I think if the
Reserve Bank did lower rates, that would be a signal
that says, look, things are going to get better and
try and hang on. But it takes a while for
those of those signals to flow through into reality. I

(02:17):
suppose twelve to eighteen months.

Speaker 1 (02:19):
Usually, Allen, thank you very much for your time. Allan
McDonald the Employers and Manufacturers Association.

Speaker 2 (02:25):
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Speaker 1 (02:29):
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