Over at Whale Oil I spotted this piece by the NBR which discusses the claims of “40,000 job losses in manufacturing” – a claim I think I’ve heard from the Greens in the past, I’ll include a link if someone gives me one 🙂 . [Update: Link here, along with a pointer that it is from QES for 2008 to now. Adjusting for seasonal variation this specific claim does look a little exaggerated in terms of filled jobs (but I still don’t think it is necessarily a misleading claim in this context) – I’m also not sure why we’d ignore the 2005-08 period given this is when the real exchange rate issues really kicked into gear.]
The figures quoted by Whale Oil suggest that the drop was only half that over the past 17 quarters. However, the people who have been claiming that employment in the manufacturing sector is down by around 40k over time are not wrong.
For that, let’s jump on the Statistics New Zealand site and look at the HLFS (Household labour force survey). Below I have a graph of annual average employment from 2004 onwards:
Between it’s peak in March 2005 and now, average annual employment is indeed down by 44,125 people.
Now this measure isn’t perfect – but it is better than the QES. The HLFS measures “employment”, the QES measured the number of jobs (people can have multiple jobs) and it excludes self-employment and some areas such as agriculture. Self-employment is pretty important in a industry filled with small firms like NZ manufacturing, so we have to keep that in mind! [Note: For some context, the level of annual QES jobs are currently 77% of the level of annual HLFS employment in manufacturing – even though there are multiple jobs for some employees. Normally this ratio is closer to 80%, but it does indicate that some true underlying jobs/employment may be missed by the QES 🙂 ]
Of course, we need to think about “why” employment is shifting out of manufacturing and what that means before we can say anything about it – there is no fixed “lump” of jobs, and the structure of the economy does change. Eric Crampton notes that in this tweet, pointing to this post on the manufacturing industry.
But in of itself, the number is not bogus –
it is straight from the HLFS! it could have come straight from the HLFS 😉
Update: In terms of the NBR pieces conclusion – it is true there has been a secular decline over a long period of time. Understanding why in this case is important – and exciting. Global manufacturing employment is falling, could we be about to experience the “manufacturing revolution” version of the “agricultural revolution”? I hope so, and I hope that if this is the case then unlike the agricultural revolution society/government helps people with the transition 🙂
Update again: I’ve noticed people from all the sides blaming government X or Y – a structural trend in the industry, a downturn in global manufacturing, and seizing up of credit conditions to the point where we haven’t been building, are not factors I would blame on any politicians. And I’m notoriously harsh on politicians.