NZ update: Construction recruiters in Auckland driving flash new cars
performance is the level of recruitment agency activity. Whether it’s
strong organic growth or hot levels of M&A activity, you can be sure
that recruitment agency profit levels make new markets attractive for
aggressive agency owners with deep pockets or strong credit ratings.
recruitment agency blogger, Jonathan Rice (owner of rec-to-rec firm,
Rice Consulting) for his incisive and witty weekly blog
The Whiteboard on all things to do with the NZ recruitment scene.
A couple of
Jonathan’s recent
posts
have
highlighted the
growth in the numbers of recruitment agencies in the local market,
especially the influx of overseas operators hanging out their shingle or
buying locally-owned agencies.
in the NZ economy and the recent Statistics New Zealand Labour
Market Statistics:
December 2015 quarter appears to strongly support the positive
economic position.
|
Category |
Dec 2015 |
Change from Dec 2014 |
|
Employed |
3,656,000 |
+2.3% |
|
Unemployed |
133,000 |
-6.7% |
|
Unemployment rate |
5.3% |
-0.7 percentage points |
|
Filled jobs |
1,848,000 |
+2.7% |
|
Participation rate |
68.4% |
-1.0 percentage points |
|
Total weekly paid hours |
57.1 million |
+3.8% |
|
Wage inflation (since Dec 2014) |
+1.5% |
|
-
5.3% is the lowest unemployment rate since March 2009 (when
it was 5.2%). This fall reflected 16,000 fewer people being
unemployed over the quarter.Over the 2015 year, the number of unemployed men was unchanged , while
the number of unemployed women was down 10,000 .In the year to December 2015, the unemployment rate for the North
Island fell 0.6 percentage points, to 5.6%, while that for the
South Island was unchanged, at 4.1%.The unemployment rate for Māori fell 1.6 percentage
points to 10.6%in the year ended December 2015 The unemployment rate
for Pacific peoples dropped over the 2015 year to 9.7% (from
11.4% a year earlier)Highlight 2: Auckland construction industry recruiters are probably
driving flash new cars-
Annual employment growth in Auckland increased 2.9% in the December
2015 quarter, after dropping to 1.5% last quarter. This came from
23,100 more people being employed in Auckland over the yearThe construction industry was the largest contributor to annual
employment growth, with 27,500 more people employed over the year to
December 2015.The majority of construction employment growth was in Auckland, with
18,900 more people employed over 2015.Technicians and trade workers also had a large employment growth,
with 20,800 more people employed in this occupation group over the
year.Highlight 3: Wages growth continues to beat inflation growth-
In the year to December 2015, prices of goods and services bought by
households, as measured by the consumers’ price index (CPI)
increased 0.1% – the lowest annual increase since 1999.The Labour Cost Index salary and wage rates (including overtime)
increased 1.5% over the same period. The bad news for employees is
that this is the lowest annual increase since the March 2010
quarter.Wage inflation has now been higher or equal to the CPI for more than
four years.Lowlight 1: Labour force participation rates continue to drop-
The labour force participation rate continued to decline from a
record high in the March 2015 quarter . This is the third quarter
in a row in which labour force participation has fallen.This continuing decrease in labour force participation was partly
due to more retirees (up 31,500), and more people at home but not
looking after children (up 15,400).One of the key statistics driving recruitment agency growth is the
‘Filled jobs’ category. A 2.7% annual rise over the most recent 12 month
survey period (January 2015 – December 2015) comes on top of a 2.5% rise
in the 12 month period, January 2014 – December 2014 and a 1.9% rise in
the 12 month period, January 2013 – December 2013.If this New Zealand ‘Filled jobs’ growth continues its current momentum,
you can sure that there will be plenty more upcoming Kiwi recruitment
agency growth and acquisition activity worth writing about on The
Whiteboard … and an increasing number of Kiwi recruiters driving flash
new cars.
OK, some interesting pointers – but some clarification required;
Flash Cars – Funnily enough leasing cars in NZ quite a bit different in regards to tax than OZ – there is no real advantage – one recruiter has well over 600 contractors out and drives a mid 2000's Japanese SUV – but does have a real estate portfolio that would make you cry – must have something to do with no stamp duty and no capital gains tax !!!
Auckland is on the cusp of some staggering growth – Christchurch build is starting to slow , and alot of construction staff will be re deployed to Auckland – with positive migration now in full force and the majority moving to the Auckland area , any construction recruiter based in Akl will be licking their lips in anticipation
The bar is very very low when it comes to opening a company in NZ – $50 and about 10 minutes online to register will get you going
Acquisition – here is an interesting situation – the majority of NZ recruiters ended up working out they could earn more for doing less and opened on their own and the majority have the "3B disease" ( Boat , BMW, Bach-holiday house ) – so when they get told they will get a little cash, and then have an onerous 3 yr buy out where they have to report to someone again and then be under a 3 to 5 year restraint – doesn't take Einstein to work out if you keep doing what you are doing , at the end of an 8 year period you probably have the same amount of $$$ and not have to report to an Australian based boss ( don't underestimate how much of a killer that is! )
I suspect more will diversify into construction, there will not be many acquisitions and we will keep taking pot shots at Australia and how badly the economy is doing and how many large companies keep closing