Labour gap of 6000 forecast

Press, 14 January 1982, Page 7

Labour gap of 6000 forecast

PA Wellington An extra 6000 construction workers are needed to build big projects planned to get underway by the mid-1980s, according to the director of the Institute of Economic Research. Mr Brian Easton. Overseas borrowing to finance the projects should allow for extra imports of any skilled immigrants used to fill the labour gap, he said. "We will be desperately short of some labour skills in some of the major projects,” he said. Only demand predictions for labour had been made to date, and they suggested: • The projects would more than double the present onsite construction workforce of 4500 to around 10,500 by the mid-1980s.

• Demand for welders would increase from 250 to 1000. carpenters from 500 to 1250. fitters from 500 to 1900, electricians from 250 to 850, and other trades and labourers 3000 to 5500. Mr Easton said that where the workforce would come from had not yet been studied. Possibilities included immigration. local training, and enticing tradesmen from retirement. other jobs or other industries.

Figures had also not yet been calculated for extra demand from off-site work, such as prefabrication of equipment, supply of housing and social services, and other downstream industry.

But one study, looking'at productivity of immigrants from various regions, and

their effect on local housing and social services, plus imports. had just been completed. Mr Easton said. This study rated North Americans as the best value-for-money immigrants. Although the information was from the early 19705. results.-after adjusting for cost changes since, were still generally accurate, he said. The results suggested: • During times of excess capacity in the local economy. North American immigrants each generated ?n extra $4200 a year net. after allowing for their extra demands on social services, housing and imports.

• Australians and British rated second, creating a net $2700 each, and South Pacific Islanders third, with a net $lBOO each.

• Tight years during the early 1970 s had required extra capital spending on housing and services for imigrants. plus job creation costs. But all had paid the extra costs and started adding to net output after two years.

Mr Easton said that generally. there was a lot of capacity in the New Zealand economy.

But one complication was that the general slackness did not highlight regional variations, such as tight housing and labour markets in Taranaki, or excess labour on the West Coast. However, from these complexities Mr Easton concluded:

"If we can bring in the skills up to the first half of the 1980 s. when there is

under-capacity in the economy, it should not be too damaging, providing the balance of payments is covered." Immigration would bring further complexities with each immigrant requiring extra imports, generating more pressure on foreign exchange. The institute study suggested that at one extreme — immigrants filling the entire skills shortage in a slack economy — immigration would require the spending of an extra $9 million each year on imports. But if the economy was tight, or tight in crucial regions, the extra imports could total $2O million a year. If most migrants came from Australia, the United Kingdom, and the United States, where skills were more readily available, extra imports for a tight economy would add $25 million each year to foreign exchange bills. "The study shows.” Mr Easton said, “that if these workers go into industries which are creating or saving foreign exchange, in a period when there is under-capacity in the economy, then the economic outcome will be beneficial.”

But he said that it might be that borrowing for the projects should include finance to cover extra imports by immigrants. "Official planning has not thought through a lot of these issues yet." he said. “It depends on the number of migrants needed."