Migration boom credited with driving strong jobs growth

Monday, 29 May 2023

Booming migration is likely to be behind sharp growth in the number of filled jobs, economists say.

Compared to March, the number of filled jobs was up 0.6% in April, to 2.37 million.

Filled job numbers are up 3.8% year-on-year.

Westpac senior economist Michael Gordon said it was the fastest rate of growth since January last year.

“This acceleration has no doubt been helped by the resurgence of migrant arrivals. Net inward migration has risen to more than 65,000 people over the last year, and recent months have been running at a pace equivalent to more than 100,000 a year,” he said.

“Even so, the annual pace of jobs growth suggests that hiring is outstripping the growth in the working-age population. In other words, the most timely data on the labour market is not flashing any recessionary signals yet – if anything just the opposite.”

Gordon said the data was something the Reserve Bank would need to watch closely as a reminder that demand for labour was as much a factor as the supply when it came to inflation pressure.

Year-on-year, the biggest growth in filled jobs by sector were in accommodation and food services, up 12.2%, and transport, postal and warehousing, up 8.2%.

Auckland jobs were up 4.2%, Canterbury’s 4%, Wellington up 2.6% and Otago’s up 5.6%.

Infometrics chief economist Brad Olsen said filled jobs were up 2.3% in four months.

He said that was “pretty quick” given that the labour market was meant to be nearing capacity.

“In part it reflects the greater labour supply through the higher level of migration which is supporting a higher level of employment.”

He said that was evident in the age ranges seeing job growth. There was growth in the 20 to 24-year age group for the first time In a while, and in the 30 to 34-year-old age group jobs were up 4.8%.

He said the Reserve Bank would still be waiting to see plateauing of employment growth at some stage but he did not think the data was a warning that it needed to worry yet.

He said while it would probably be watching for signs of continuing employment strength, earnings growth was starting to become more stable which was consistent with what the Reserve Bank would expect to see.

The growth in things such as accommodation and food services reflected tourism activity starting up again. “People like chefs are being hired – we haven't been able to find them for a while. And all of a sudden we are.”

He said professional services jobs numbers were still growing but not as fast as they had been. Signs were that the government was still hiring, he said.