Interview with Business and Economic Research Limited (BERL)

Getting good labour market information: how the experts do it

Can you describe how you get national labour market information on particular industries?

We work primarily off official statistics. So we gather a lot of our data from Statistics NZ (eg the Household Labour Force Survey, or HLFS). We take this data and add it to the information and large data sets that we already have.

We also look at labour costs, the Quarterly Employment Survey and, of course, the Census, to provide indicative information about what’s happening in the labour market. The HLFS provides a really good long-term series of data and is a cornerstone piece of information as it also goes into detail by industry and by region so you can build a good picture.

It’s not a sausage factory in the sense that you add A, B, C and D together and come out with a result and then do the same thing the next day. It’s a process that has evolved out of experience, knowledge and using judgement.

Economics isn’t just about numbers, it’s as much about people – those numbers represent people and their stories.

Does this process differ much when you’re looking to develop regional information?

For regional labour market information, you need to go and speak directly to more people because you can’t be as reliant on statistics.

A good recent example would be a study we did in Marlborough for the Forest Owners Association, who wanted to know the impact of their industry on the regional economy.

We have a regional database that provides us with a snapshot of employment numbers in industries and occupations within industries, so we can get a broad overview. From there, you really need to speak to people who are directly involved in the industry – about their business, how many people they employ, their productivity, exporting, importing, whether they think their business is likely to grow etc.

It can also be a bit broader, so we might ask about skill and training requirements, and which particular areas of the industry people will be required for in the future.

How do you ensure that information is as robust as possible?

There are really good sources of statistical data available, so using a combination of those to build a picture is important. We have been operating for over 50 years now, so you get a vast amount of experience, data, industry contacts and trend analysis from that history.

You also need to view labour market data in context with all the other economic factors to provide more rigour to the story. Finally, common sense is really important – we call it the idiot check. Does this make sense? Because sometimes the numbers don’t make sense and then you need to use your experience to make a judgement call on that.

Labour market information and your career

To what extent can you predict the impact of something like the global economic slow-down on the labour market?

The impact of the global economic slow-down on the labour market has been totally overplayed in some quarters, and I don’t think it will get anywhere near as bad as some would have you believe.

In terms of predicting this, we have relatively strong economic theory and past experience that tells us how things are related in an economy – for example, global markets and how that impacts on New Zealand exporters, and therefore how that impacts on industries in New Zealand and how many people they want to employ. We have got those equations out there for people to argue for or against, and interrogate.

On the other hand we also have good equations and relationships on how people behave in response to these things. We do know that the participation rate (people entering the labour market) in New Zealand has been on an upward trend for quite a long time now, for example. We don’t see that changing very much, and actually it hasn’t changed.

So, you put those two things together and we can develop a picture of the labour market over the next year, two years and five years. Granted, the global credit crisis is really new and that has created some uncertainty. In the light of that uncertainty some people go straight for the Armageddon scenario.

We at BERL believe that there are still some drivers and growing opportunities out there for products that New Zealand produces. Yes, it may seem a bit miserable over the next couple of years but my behavioural model suggests that we should keep going through this if we’re clever enough. We’re a food producer in a world that increasingly needs food, for example, so surely we’re clever enough to take advantage of that!

It’s very important for the story to be told carefully and properly, because people will change or modify their behaviour accordingly. Hopefully people make career decisions with a longer term picture than the headline in the newspaper last week.

How much emphasis do you believe should be placed on labour market information in terms of planning your career?

When you’re looking at your options you take into account all of the usual things – your skills, interests etc. But also you need to look at where the employment options are. If you want to stay in a certain region, where are the jobs there?

Many people don’t really think of a career path or make career decisions in a considered, long-term way, and don’t look at the information that is available to them.

A good example is the kid who just does the subjects they like at high school and then says "Right, now what should I do?" In terms of keeping options open, you need to emphasise the relationships that exist between subjects and careers – reinforcing the idea that the world is actually interrelated.

In amongst all that you’ve got labour market information that tells you about the skills required for different occupations, spread, demand and pay. So it’s helpful for people to know the broad context so that they don’t close off opportunities.

How can people find out more about their regional labour market situation?

The first thing to find out is what main industries make your region tick. A good starting point is the local EDA (Economic Development Agency) and council websites. They have a wide range of information about the big employers, economic contribution and employment numbers, as they speak a lot with industry and often commission their own labour market research for the region.

From there, the Statistics New Zealand regional profiles give a good broad picture and demographic information. The Career Services website also provides information on local labour markets and employment.

A really good thing to do is to speak directly with employers to find out more – Who’s employing? What jobs are going? What growth are they expecting over the next four to five years?