10000 new workers a year needed to fill labour gap in Canterbury, study finds – Stuff.co.nz

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Canterbury will need 10,000 new workers a year to fill the labour gap left by Covid-19, a recent research paper has found. (File photo)

Canterbury will need 10,000 new workers a year to fill the labour gap left by Covid-19 and the New Zealand border which has been closed since March 2020.

This is the finding of Lincoln University researcher Dr David Dyason in a recent paper assessing the labour market response to Covid-19 border restrictions.

The paper stated that while the countrys Covid-19 elimination strategy proved effective in limiting the number and length of lockdowns, and enabling movement of people throughout the country, the closed borders have substantially lowered New Zealands labour intake.

In Canterbury, migration played a prominent role in the population growth at the start of the rebuild programme after the 2011 earthquakes, said Dyason.

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The 2018 census revealed between 2013 and 2018, there was an inflow of people from other regions in New Zealand that amounted to a net total of 3288. On the other hand, the number of people who came from overseas to settle in the region during the same period amounted to 42,192.

Data from Statistics New Zealand showed a continuation of this trend, with the population growth for the region between 2018 and 2020 being primarily driven by net-international migration, accounting for 80 per cent of population change.

Pre-pandemic labour inflow coupled with lower near-term economic activity created a short-term labour buffer for the region, said Dyason, but this is quickly reducing.

The workforce gap between those retiring or leaving the workforce and new workers entering, is expected to increase annually, and the initial gap would require net inward migration of the working-age population to average at least 10,000 per year.

STUFF

The New Zealand hospitality industry is battling a labour shortage which has been exacerbated by the border closure and the departure of many migrant workers. (Video first published in July 2021)

For a region that relied heavily on the international labour market, the border restrictions as a result of the Covid-19 pandemic could potentially be disastrous if restrictions remain in the long run.

Current patterns in natural population growth will not be sufficient to satisfy the labour demand in Canterbury over the medium term, he said.

But what about those already in New Zealand who are looking to be employed?

According to figures from the Ministry of Social Development, there were 112,056 people on the jobseeker benefit who were work-ready in September last year.

But it is not that simple, said Dyason.

You will never get a 100 per cent employment rate within an economy, that is unheard of. You will always have a segment of the market that is not economically active, and there are many reasons for that.

It could be because there are no jobs in their field of expertise, it could be seasonal unemployment, it could be a lack of skills, etc.

ALDEN WILLIAMS/Stuff

The New Zealand border has been closed to most migrant workers since March 2020. (File photo)

The recent labour market results suggest that capacity within the labour market is shrinking and pressure on relaxing the strict border requirements are needed to support the economy, he said.

Much of the workforce for the next couple of years could be sourced locally, however, the long-term demand for jobs would require sourcing labour from outside the region.

Dyason said as labour supply tightens, the competition between industries to source students and other employees is expected to increase. This would lead to wage and salary increases that in turn will drive up inflation.

Without significant changes in productivity or natural population growth, regions and countries that historically relied on immigration to support the economy are likely to continue to rely on migration as a labour source.

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10000 new workers a year needed to fill labour gap in Canterbury, study finds - Stuff.co.nz