By: Simon Hartley
Tourism operators, dairy farming and construction projects are giving jobs confidence to Otago and Southland.
The two regions have been punching above their weights in several economic sectors during the past year, notching quarterly gains from the booming tourism cycle, underpinned by solid agricultural commodity prices.
Commercial building activity in Dunedin is attracting people and businesses to the city, and the hospital rebuild is yet to make an impact. Proposed CBD development in Invercargill has ratcheted up increasing confidence and although Otago’s monthly BNZ-Business NZ manufacturing and service sector data has fluctuated in recent months that has been an easing from earlier country-topping highs.
A Westpac McDermott Miller employment confidence survey put Otago’s confidence highest of 11 regions and Westpac senior economist Satish Ranchhod said although overall confidence in the labour market eased slightly across the country in September, it was otherwise fairly buoyant compared with the other measures of confidence.
“Employment confidence has firmed in Otago and the central North Island, but has fallen sharply in the upper North Island, especially in the Waikato,” he said.
However, many of the 1556 respondents were concerned about their incomes, given the number who reported getting a pay increase had fallen to a three-year low.
“Workers have also become very pessimistic about their chances of a pay increase over the coming year,” Ranchhod said.
Workers’ job opportunity expectations also declined, as did growth in expected earnings and their personal job security; albeit only in single figure point range.
However, Ranchhod said overall labour market confidence was “particularly strong” in Otago, Gisborne-Hawke’s Bay and Bay of Plenty.
“Economic conditions in these regions have been boosted by improved returns for horticulture exports and solid growth in house prices,” he said.
International tourism was continuing to boost Otago and Southland respondents continued to highlight solid levels of job availability.
“The region is expected to continue to benefit from growth in meat and dairy exports, while elevated construction activity should ensure the region is better able to meet an expected increase in tourists to the area,” Ranchhod said.
Worker shortage a worry
Otago Southland Employers’ Association chief executive Virginia Nicholls said confidence in the labour market in Otago and Southland was strong, but businesses are concerned about finding both skilled and unskilled staff.
“Recruiters remain busy across a significant number of sectors and businesses are actively hiring,” she said.
In Otago, construction is looking for qualified tradespeople for residential and commercial projects.
“As a result, project managers, surveyors, architectural designers, draughtsmen and women are also needed.
“There’s active recruitment for some of these roles from overseas,” she said.
Trades staff are also in short supply in Southland. There had been recent recruitment drives by manufacturers in Southland across a variety of export sectors, including aluminium, wood processing, meat and milk processing.
“Meat processors are also investigating bringing in meat process workers from overseas,” she said.
Cherries on top
Manufacturers are also looking into using automation and robotics.
“More tourists are visiting the region, and there’s a number of unskilled roles that the hospitality industry is finding challenging to fill,” Nicholls said.
Nicholls said the survey results lined up with feedback the associations had got from businesses around the region for some time.
There was evidence of increased business investment, particularly in construction and tourism, and in Southland manufacturing had been very busy, she said.
She added Central Otago’s horticulture and viticulture sectors were looking to grow, including planned new cherry plantings in the next few years.
“As a result there will be an increased need of workers and extra accommodation,” Nicholls said.
Federated Farmers’ Otago president Simon Davies said southern farmers should be feeling good about financial returns in the season ahead.
The dairy forecast payout price was “positive”, although dairy farmers have rising concerns with Fonterra booking its first loss in 17 years and how that will affect the co-operative and themselves.
He said a “raft” of potential legislative and compliance changes were “barrelling down” on farmers, covering biodiversity, the revamping of tenancy agreements, the emissions trading scheme and forestry planting programmes, to name just a few.
“Almost every piece of legislation written in this country will in some way affect farmers,” he said.
Otago Chamber of Commerce chief executive Dougal McGowan said the positive data for the south was largely underpinned by rising house prices and values, but also boosted by the positive sentiment in the wider rural sector.
Source: The Country