sit skilling the community 160709 slide 1 skills required by the nz economy presentation to skilling...
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SIT Skilling the Community 160709slide 1
Skills required by the NZ economy
presentation to
Skilling the Community – Preparing for the UpturnSouthern Institute of Technology
16 July 2009
Dr Ganesh NanaChief Economist
Editor, BERL Forecasts
Business and Economic Research Ltd
SIT Skilling the Community 160709slide 2
Agenda• the current NZ economic situation
• preparing for the upturn
• ‘tertiary’ role
• what next?
SIT Skilling the Community 160709slide 3
Unemployment
0
3
6
9
12
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
SIT Skilling the Community 160709slide 4
Employmentannual change
-75
-50
-25
0
25
50
75
100
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
000s
SIT Skilling the Community 160709slide 5
EmploymentAnnual growth: Mar 09 cf Mar 08
-36 -24 -12 0 12 24
Northland
Auckland
Waikato
Bay of Plenty
Gisb & HBay
Taranaki
Mana-Wang
Wellington
Nel-Marl & WC
Canterbury
Otago
Southland 000s
SIT Skilling the Community 160709slide 6
Anatomy of employment growth
• 418,000 extra jobs over 10 years to March 2009* reduction in unemployment of 19,000
* increase in ‘population’ 288,000
* where did other 111,000 come from?
SIT Skilling the Community 160709slide 7
Anatomy of employment growth 1999-2009
unemployment change
5%
'population' change
69%
participation rate change
26%
SIT Skilling the Community 160709slide 8
Labour force participation rate
62
66
70
74
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
SIT Skilling the Community 160709slide 9
Labour force participation rate
62
66
70
74
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
New Zealand
Southland
SIT Skilling the Community 160709slide 10
Labour force participation rate - females
50
54
58
62
66
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
SIT Skilling the Community 160709slide 11
Labour force participation rate - females
50
54
58
62
66
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
New Zealand
Southland
SIT Skilling the Community 160709slide 12
Labour force participation rate – 55-60yos
50
60
70
80
90
Mar 89 Mar 93 Mar 97 Mar 01 Mar 05 Mar 09
%
SIT Skilling the Community 160709slide 13
Net migration to NZ from regionsannual totals
-40
-20
0
20
40
May 01 May 03 May 05 May 07 May 09
000s
from Oceania
from Asia
Europe, Americas& other
SIT Skilling the Community 160709slide 14
The Achilles’ Heel of the NZ EconomyThe Current Account Balance of the Balance of Payments
as a % of nominal GDP
-15
-10
-5
0
5
Mar 56 Mar 61 Mar 66 Mar 71 Mar 76 Mar 81 Mar 86 Mar 91 Mar 96 Mar 01 Mar 06
SIT Skilling the Community 160709slide 15
Preparing for the upturn …
“Looking beyond our present circumstances, our future depends on our ability to export.”
Budget Speech, July 1980
SIT Skilling the Community 160709slide 16
How many are needed?Projected change in employment by occupation
2007-2026
0
40
80
120
160
Legislators, Administrators and Managers
Professionals Technicians and Associate Professionals
Clerks Service and Sales Workers
Agriculture and Fishery Workers
Trades Workers
Plant and Machine
Operators and Assemblers
Elementary Occupations
000 FTEs
SIT Skilling the Community 160709slide 17
Which skill is (most) important?
• using economic model to explore impact of increase in particular skill types
• laboratory-type experiments
• ask:* which skills provide biggest boost to
economy?
SIT Skilling the Community 160709slide 18
Model experimentsIndirect impact on GDP of additional person
0
20
40
60
Professional, managerial
Associate professional,
technical
Trade workers, machine operators
Primary production
Clerical, customer
service clerk
Drivers Retail, hospitality
service
Labourers, elementary
workers
$000s
SIT Skilling the Community 160709slide 19
Economy is integrated system
• focus on particular skills ignores relationships inherent between industries and sectors
• similar to asking what industry is most important?
SIT Skilling the Community 160709slide 20
Economics is …
liquidityswap rates
house pricesinterest rates
inflationleverage
debthedge funds
ratings
people
machinery &equipment
land
buildings
water
technology
skills &knowledge
experience
businesses
networks
innovation
SIT Skilling the Community 160709slide 21
A sobering thought …
• Of NZ’s 20-40 year olds more than a quarter of a million (268,000) have, AT BEST, a level 1 qualification
• and, remember, the majority of these will remain in NZ’s labour force for the next 20 years (if not longer)
• this group will play a significant role in NZ’s productivity performance for the next 20 years (at least)
SIT Skilling the Community 160709slide 22
Transforming the New Zealand economy needs:
• more people
• with more skills
• of all skill types
… and there is economic and social justification to support all skill provision
* vocational
* trades
* academic
* professional
SIT Skilling the Community 160709slide 23
Key components of NZ labour supply growth
• the traditional flow* new entrants from school
• the untapped potential* those already in workforce
• the new flow* those previously ‘not in labour force’
* migrants
SIT Skilling the Community 160709slide 24
‘Tertiary’ role (1)
Attract and train: • secondary graduates in vocational and
professional skills
• lower skilled people in the workforce to increase generic, or specific skills
• older people with skills that enable them to keep working
• engage mature people not in the labour force to begin learning, and assist them to staircase
SIT Skilling the Community 160709slide 25
‘Tertiary’ role (2) • to recognise that the ‘non-
traditional’ flows are (potentially) an important source for increases in overall skills
SIT Skilling the Community 160709slide 26
“Growth in New Zealand will be propelled by technological change, investment and higher productivity.”
Budget Speech, July 1978
Preparing for the upturn (2)