Much has been made (and rightly so) of the decline in the output of our internationally competing industries (the so-called tradable sector) since around 2005, while non-tradables output grew strongly.

Obvious causes include the loss of international competitiveness associated with increasing regulatory burdens and the huge increase in public spending resulting from the policies of the last government.

This chart taken from a 2010 Treasury report to the minister of finance released under the Official Information Act tells the same story by looking at employment growth in the same period.


The chart shows that employment growth since 2004 has been concentrated in the non-tradable sector, including industries such as health care and social assistance (+26%), public administration and safety (+21%) and construction (+20%), while tradable sector employment (defined here as the primary and manufacturing sectors) has been weak (-8%).

This is not a picture of a healthy economy.  It highlights the economic imbalances the government talks about and underlines the need to shift resources, including labour, from the non-tradables sector (especially the public sector) into our internationally competing industries.


  1. The brutal truth is that NZ doesn’t need any more farmers and carpenters – or indeed any more workers in the exporting sector.

    NZ has about 400,000 productive people in the exporting sector supporting another 4,000,000 who are basically bludgers.

    As Fonterra and other export industries increase efficiency, of course Primay employment will go down at 1-2% per annum, I’m surprised it’s so small.

    There is no future in Manufacturing in NZ, again the decline is smaller than I’d expect.

    Of the rest, go-ahead Kiwis go away to Australia, and the rest bludge in NZ.

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