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This report presents the Ministry’s employment forecasts to 2025. Employment is forecast to grow by 1.9 per cent annually, adding about 48,000 workers on average per year to the workforce in the next 10 years. Employment growth is projected to remain above the long-run average in the medium-term (five years to 2020) but decline slightly in the longer term (five years to 2025).


Demand for highly-skilled workers (managers and professionals) will be the strongest over the medium to long-term. The hospitality industry will also provide steady employment growth over the 10 years to 2025. Strong migration-led household spending and activities in the construction and business services industries will mainly drive employment growth over the forecast period. Over the forecast period, strong employment growth is related to an increase in labour supply resulting from higher net migration. Net migration is forecast to remain high in the next two years and is likely to be above the long-term average in the medium to long term.


The Ministry uses the forecasts to inform its medium and long-term policy advice relating to immigration policy settings and priority setting for tertiary education and industry training.


Key points

  • Employment is projected to grow annually by 2.3 per cent (or 54,200 on average) in the 2015-20 period and 1.6 per cent (or about 41,800 on average) over the following five years to 2025.
  • This employment growth is supported by strong economic growth — average annual GDP growth of 3.0 per cent and 2.7 per cent over the 2015-20 and 2020-25 periods.
  • The construction and utilities industry (6,800 workers per year) is forecast to show the strongest gain in employment in the 10 years to 2025. Employment growth (1,300 workers per year) will be weakest in the primary industries.
  • Employment growth will be strongest for highly-skilled occupations (2.5 per cent or 27,400 annually), and weakest for lower-skilled occupations (1.3 per cent or 14,200 annually) over the forecast period. Growth for skilled occupations will be stronger in the medium term (2.6 per cent) but will moderate in the long term (1.6 per cent).
  • Increasing labour supply constraints arising from an ageing population result in higher productivity growth over the 2020-25 period compared with the 2015-20 period (1.1 per cent per year compared to 0.7 per cent).
  • About 30,000 workers are projected to retire during the 2013-20 (post-census seven year) period, even with further increases in participation by the older workers.
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