Antipodean Labour Market Compendium

Very different starting points

We are launching a comprehensive chartpack on labour markets in Australia and New Zealand. It will be updated at least on a quarterly basis.

Labour market conditions are clearly very different on either side of the Tasman.

New Zealand’s recession has resulted in almost a 2ppt rise in the unemployment rate and sharp slowing in wages growth. In contrast, Australia’s jobless rate has risen by just 0.6ppts and wages growth, while slower, is around average rates despite very weak productivity growth.

The skew in demand growth in Australia towards non-market - or government-aligned - industries has provided a strong support to employment growth and maintained relatively tight labour market conditions overall. Nonetheless, firms are increasingly reporting that labour availability is gradually improving.

Something that has been relatively common across economies is the different experiences of labour market ‘insiders’ (i.e. the employed) compared with ‘outsiders’ (those wanting work).

The share of workers remaining IN employment between labour force surveys is at, or close to, record highs in Australia, New Zealand and the United States.

But, the share of the unemployed and people outside the labour force moving into employment has fallen, particularly so in New Zealand.

The uncertainty caused by tariff and trade ructions is obviously casting a cloud over the economic outlook, including in Australia and New Zealand. Prior to this chaos, growth in both Antipodean economies had started to improve.

Indicators of labour demand in New Zealand have been showing signs of stabilising and jobs growth had turned slightly positive.

Labour demand in Australia appears to still be gradually slowing but the labour market remains unusually tight by global standards.

The attached labour market chartpack provides a comprehensive overview of both short-term developments and longer-term trends in Antipodean labour markets.