New Zealand's unemployment rate remains at 3.4% as wages rise

New Zealand's unemployment rate stayed at 3.4% in the March 2023 quarter - and while the government welcomed the data, employers said they are facing pressures due to the lack of talent.

Data from Stats NZ revealed that the underutilisation rate decreased to nine per cent, while the labour force participation rate went up to 72% and the employment rate increased to 69.5% in the March 2023 quarter.

"Employment and the working-age population increased by similar levels in the March 2023 quarter, both up 22,000," Stats NZ said in a media release.

Meanwhile, all salary and wage rates, including overtime, increased 4.3% in the March 2023 quarter, according to the Stats NZ.

The average total weekly earnings per full-time employee rose 7.1%, as average ordinary time hourly earnings rose 7.6% to $39.83.

Unemployment near record lows

Finance Minister Grant Robertson called the latest statistics a "positive result," while pointing out that the recent wage rate increase outpaces the country's 6.7% inflation rate.

"We've created 281,000 jobs since 2017, the unemployment rate is near record lows and wages are growing. This is the best response to New Zealanders dealing with cost-of-living pressures," Robertson said in a statement.

The government said New Zealand's unemployment rate also stands "favourably" against Australia, the United States, the United Kingdom, and Canada.

‘We are still very short of people and skills’

However, employers aren't as excited as the government on the latest labour force survey.

The Employers and Manufacturers Association (EMA) said the latest figures indicate that pressure remains on employers to find talent.

"When you link those numbers back to our recent Skills Shortage Survey, it shows we are still very short of people and skills in New Zealand," said Alan McDonald, EMA's head of advocacy and strategy, in a statement.

EMA's Skills Shortage Survey released early this year found that nine in 10 employers in New Zealand are struggling to find talent, with the country's immigration settings posing a problem.

"While migration numbers have increased rapidly there is still an imbalance in the system that weighs more heavily towards university and white-collar qualifications than technical and vocational skills," McDonald said.

"That's led to a situation where we have members who can't take on apprentices because they have run out of skilled people to train them, or they can't expand the business because they don't have enough skilled people to meet any increase in orders."

Investing in skills, training

Robertson has acknowledged that more work must be carried out to help employers find the talent that they need.

"We will continue to invest heavily in skills and training for New Zealanders. Our immigration settings are attracting a significant number of overseas workers and we will continue to look at ways to respond to help fill vacancies in what is a competitive global market for workers," the minister said.

For the EMA, it said it would be looking at the budget to see if there are "measures to support productive growth." It also called for new investments in tech, machinery, and training to boost productivity and lift people to higher-paying roles.

"Similarly, greater recognition and support for vocational education and training in the workplace is a key to boosting both productivity in the economy and skill levels in our workplaces. And we'd really like to see a continuation of support for schemes like Apprenticeship Boost," McDonald said.