(Bloomberg) — New Zealand’s working-age population growth remained near a record low in 2022, adding to signs of a persistent labor shortage that could underpin wages and inflation.
(Bloomberg) — New Zealand’s working-age population growth remained near a record low in 2022, adding to signs of a persistent labor shortage that could underpin wages and inflation.
The number of residents aged 15 years and over who could work rose by 20,200 last year, Statistics New Zealand said Tuesday in Wellington. That follows an increase of just 13,000 in 2021, which was the smallest gain since records began in 1987.
A worker shortage has fanned a record climb in wages as employers pay more to attract and retain labor. That has triggered a surge in consumer price inflation to a three-decade high, forcing the Reserve Bank to respond with aggressive interest-rate hikes.
The central bank increased the Official Cash Rate to 4.25% in November and projected it will need to rise to 5.5% this year. Investors are betting the OCR will rise to 5% at the next review in February.
Ordinary time wages for non-government workers rose 3.8% in the third quarter from a year earlier — the most since the Labour Cost Index series began in 1993.
New Zealand began progressively re-opening its border last year after it was closed in March 2020 at the onset on the Covid-19 pandemic. That has started to lift the inflow of migrant workers, although there have also been changes and delays to visa rules and many companies continue to report shortages of skilled staff.
The RBNZ in November projected the working age population will grow by 40,000 in 2023.
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