Critical staff shortages hamper business and the economy
A new report by Sense Partners for BusinessNZ: Labour Market Conditions for Business shows critical worker shortages, record high levels of employment, and record high demand for goods and services, highlighting the need for immigration to start flowing as the border opens.
BusinessNZ Chief Executive Kirk Hope says the report puts some data behind what the BusinessNZ Network has been hearing from businesses since the pandemic began, that they are desperately short of skilled employees and having significant difficulties filling vacancies.
“There is no spare capacity in the labour market, and it has been made more acute by having our borders closed to immigration for so long. With borders now opening up, we also risk a net outflow of workers from New Zealand and an even bigger skills shortage crisis if we don’t get immigration settings right.
“The report says the situation will remain critical for at least two years, so it is important that any immigration reset does not deter critical workers from coming to New Zealand in the short term.
“If we are to rely less on immigration to fill our skills gaps, the report notes we will need structural changes to the education and training sectors, to our capital markets, and increased investment in new capital, systems and processes. These will take time, and immediate labour and skills shortages will intensity significantly.”
The report notes that data indicating wages have not increased significantly is not a good indicator of surplus labour being available, as there is typically a lag effect until that starts to show through in the data.
Kirk Hope said the report will be sent to the Workplace Relations and Safety Minister with a request for an immigration reset that takes account the need for immigration to support New Zealand’s economic recovery in the face of increasing difficulties that businesses are facing in every sector and in every part of New Zealand.
“BusinessNZ favours a simple, easy to understand and permissive immigration policy that supports economic growth. New Zealand needs immigration at all skill levels, and we need to welcome migrants back to New Zealand and acknowledge the contribution they make to the economy and our communities,” Kirk Hope said.
- NZ’s employment is at a record high, and is one of the highest in the OECD
- The pool of people not working is at a record low
- Job ads are 33% higher than before the pandemic
- There is no ‘great resignation’ phenomenon as has been seen in the USA
- Labour shortage is the biggest constraint to economic growth (NZIER Quarterly Survey)
- Labour constraints will limit growth and stoke inflation
- 82% of Territorial Authorities have vacancies well in excess of locally available labour.