Technical notes

Employment

Industry employment numbers are from Infometrics’ Regional Industry Occupation Employment Model (RIOEM). The model draws heavily on quarterly and annual Linked Employer Employee Data (LEED) published by Statistics New Zealand. RIEM differs from data from Business Demography in that it is a quarterly series (BD is annual) and it includes both employees and self-employed, whereas BD only includes employees.

Employment is measured as an average of the four quarters making up each year. The unit of measurement is filled jobs.

Demographics

The demographic characteristics of employees in each sector are sourced from the 2013 and 2006 Population Censuses.

Employment in each sector is defined in terms of both industry and occupations using an industry-occupation employment matrix. After defining the sector on the matrix we sum employment across all occupations in each industry to arrive at employment by 500 industries. We measure the demographic characteristics of employees in these industries using data from the 2006 and 2013 Population Census and aggregate across industries to arrive at an estimate for the sector as a whole.

Occupation

Occupation employment numbers are from Infometrics’ Regional Industry Occupation Employment Model (RIOEM). Employment in each industry is converted to occupational employment using the relationship between industry and occupational employment observed in various Population Censuses. The Population Census measures the occupational composition of employment in each industry and how this changes over time. Occupations conform to the categories used in the Australian New Zealand Standard Classification of Occupations (ANZSCO).

GDP

In this profile Gross Domestic Product for each sector is estimated by Infometrics. A top down approach breaks national production-based GDP, published by Statistics New Zealand at 32 industries, down to 54 industries using nominal GDP data published in the national accounts and further to 500 industries using earnings and employment data from LEED. GDP is measured in constant 2023 prices.

Business units

Data on the number of businesses is sourced from the Business Demography statistics from Statistics New Zealand. Businesses are measured by geographic units, which represent a business location engaged in one, or predominantly one, kind of economic activity at a single physical site or base (eg. a factory, a farm, a shop, an office, etc). All non-trading or dormant enterprises, as well as enterprises outside of New Zealand, are excluded from business demography statistics.

A significant number of enterprises are recorded as having zero employment. Enterprises in the zero employee count size category may have:

• working owners who don’t draw a wage from their business
• labour provided by other businesses or contractors
• business activity that requires no labour (eg. holding company).

Only business units that are economically significant enterprises are included. To be regarded as economically significant they must meet at least one of the following criteria:

• annual expenses or sales subject to GST of more than $30,000
• 12-month rolling mean employee count of greater than three
• part of a group of enterprises
• registered for GST and involved in agriculture or forestry
• over $40,000 of income recorded in the IR10 annual tax return (this includes some units in residential property leasing and rental).

Industrial classification

This profile uses industry categories from the 2006 Australia New Zealand Standard Industrial Classification (ANZSIC). The ANZSIC is a hierarchical classification with four levels, namely divisions (the broadest level also referred to as 1-digit categories), subdivisions (3-digit), groups (4-digit) and classes (7-digit).There are approximately 500 7-digit industries.

This profile also uses a grouping of 54 industries. These are the industries used by Statistics New Zealand in the national accounts.

Broad skill levels

Highly skilled occupations typically require a bachelor degree or higher qualification and include professionals such as accountants, teachers, and engineers, as well as most managers such as chief executives. This category is consistent with skill level one of the Australia New Zealand Standard Classification of Occupations (ANZSCO).

Medium-high skilled occupations typically require an NZ Register Diploma, an Associate Degree or Advanced Diploma. The category includes some managers (such as retail managers) and technicians (such as architectural draftspersons, ICT support technicians and dental hygienists). This category is consistent with skill level two of the ANZSCO classification.

Medium skilled occupations typically require an NZ Register Level 4 qualification. The category includes tradespersons (such as motor mechanics), skilled service workers (such as firefighters), as well as skilled clerical and sales workers (such as legal secretaries and estate agents). This category is consistent with skill level three of the ANZSCO classification.

Low skilled occupations typically require an NZ Register Level 3 qualification or lower. It includes a range of lower skilled occupations from general clerks, caregivers, and sales assistants, through to cleaners and labourers. This category is consistent with skill level three and four of the ANZSCO classification.

Earnings

Earnings data are from the quarterly Linked Employer Employee Data published by Statistics New Zealand. LEED publishes the mean earnings of full quarter jobs for each quarter. We sum the mean earnings for the four quarters making up the year to arrive at an estimate of average annual earnings.

Prices

In this profile, we present all GDP estimates in constant 2023 prices. GDP presented in constant prices is sometimes referred to as real GDP. By using constant prices we remove the distractionary effect of inflation. It enables us to meaningfully compare GDP from one year to the next.

Business unit births and deaths

Business birth and death data in this profile are at the geographic unit level. Data is presented on an annual basis (start of March to the end of February). For a birth or death to be counted in the period, it must have occurred at some stage during the year and not have changed status by the end of the period. For example, a business that ceased operation at some stage during the year, and the recommenced operation before February, will not be counted as a death.

Forecasts

The employment forecasts in this profile have been generated from the Infometrics Industry Model. This model produces forecasts of employment for 54 industries using a mix of principal component and regression techniques to link macroeconomic key indicators (e.g., inflation, interest rates, unemployment, the exchange rate, business profitability etc.) to prospects for each industry. A key aspect of this approach is that it produces an outlook for an industry that takes into account the recent performance of that industry, the impact of key influences on business performance in that industry, and is also constrained to ensure that the sum of production in all industries equals our forecasts of overall economic activity. That is, an industry can only grow faster than overall economic growth if past industrial performance and business conditions indicate that it will increase its share of national output.

Infometrics then decomposes these forecasts to a detailed industry level and uses industry-occupation employment matrices for New Zealand in order to measure total employment in a defined sector.

Full-time equivalent (FTE) employment

Full-time equivalent (FTE) employment is a way of looking at employment that takes into account the work-load of people into employment. FTE employment measures the number of people in employment for 40 hours or more per week. Two people who are employed part-time are measured as one FTE.