Rotation in the drivers of NZ growth

It's not just the strength of NZ growth that's changing. The underlying composition of growth has been evolving also. Notably, while demand in the construction sector is still strong, the sector is no longer the main driver of employment growth. That title now goes to the manufacturing sector.

"A key reason for the slowdown in construction sector hiring is that activity related to the Canterbury rebuild is now levelling off. The demand for construction workers in Canterbury (and elsewhere) is still expected to remain strong for some time", says Westpac.

But with reconstruction now well advanced, employment in the construction sector is not expected to grow at the rapid pace seen in recent years.Consistent with this rotation in the drivers of employment, employment growth has been seen in Canterbury slow sharply over the past year. 

"Auckland remains the key driver of employment growth, with strong gains also seen in the Bay of Plenty and Waikato", added Westpac.