The Department of Labour says a new Leading Indicator of Employment it has launched confirms an upturn in the labour market.
The indicator, to be issued quarterly, combines five indicators covering different sectors of the New Zealand economy. Its main function is to predict peaks and troughs in the labour market and forecast employment growth for the subsequent three quarters.
In testing, the indicator successfully forecast the current downturn in employment nine months before it happened, the department's head of labour market information Benedikte Jensen said.
The indicator continued to increase in the March quarter after a turning point was confirmed with the upturn in the September and December 2009 quarters.
Employment growth was positive in the March quarter following small growth in the December 2009 quarter.
"These results suggest that a turning point in the employment has now been confirmed and means that the indicator gave an advanced signal of this change in employment with a lead of one quarter.
"We expect that employment in the household labour force survey will continue to report small but positive changes for the next three quarters."
The indicator collates its information from the number of permanent and long-term arrivals, the Quarterly Survey of Business Opinion, the New Zealand share price index and the ANZ Commodity Price Index.
It also includes the Southern Oscillation Index, which measures changes in weather patterns which could affect agricultural output and employment.
Employment Minister Paula Bennett welcomed the introduction of the indicator.
"This tool will provide valuable information, allowing the Government to gauge the direction of the labour market and develop policy accordingly," she said.
