Horticulture labour supply and demand 2018 update Name of - PowerPoint PPT Presentation

Horticulture labour supply and demand • 2018 update Name of presenter Dion Gamperle Venue or event RSE conference Date of presentation 16/17 August 2018

Purpose of the report • To quantify the known labour shortage within the horticulture and viticulture industry • This is important as it helps with discussions on changes to the RSE cap 2

General labour market condition • Tight labour market • Unemployment rate lowest since December 2008 • Difficulty finding both skilled and unskilled labour • Lower numbers of working holiday workers and international students 3

Difficulty in finding labour Skilled labour Unskilled labour 80 60 40 Net % of firms 20 0 -20 -40 -60 -80 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 4

Growth in job vacancies by occupation 30% 25.0% 25% 20% 12.9% 15% 10.1% 10% 6.7% 5.7% 4.1% 3.0% 2.6% 5% 0% 5

65 to 76 percent of workers are New Zealanders NZ workers Migrant workers 40 Rolling average Rolling average Thousands of employees 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6

Working holiday workers 6 Working holiday workers Rolling average 5 Thousands of employees 4 3 2 1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 7

International students 1.6 Intl Students Rolling average 1.4 Thousands of employees 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 8

Production • Growth expected to continue • Driven mostly by hectares planted rather than increases in yields 9

Forecast growth in production and hectares Hectares Production Wine (LHS) Pipfruit (RHS) CAGR Kiwifruit (RHS) Summerfruit (RHS) 20 Summerfruit 3.8% Thousands of hectares 17.5 Thousands of hectares 40 15 Wine 3.0% 12.5 10 Kiwifruit 6.2% 20 7.5 5 Pipfruit 3.4% 2.5 0 0 2012 2016 2020 2024 0.0% 5.0% 10.0% 10

Forecast growth in total hours required by task Total 3.1% Maintenance / Planting 2.5% Processing 3.7% Harvest 3.5% Pruning 2.7% Thinning 2.6% 0.0% 1.0% 2.0% 3.0% 4.0% 11

Labour demand and supply model 12

Breakdowns Crops Tasks: • Pruning • Thinning • Harvesting • Packing/processing Pipfruit Kiwifruit Wine grapes Summer fruit • Maintaining the vines Regions Workers: • Permanent staff • Casual staff Northland • Work and income clients Bay of Plenty • International visitors Gisborne • NZ seasonal Labour Scheme Hawke’s Bay • Recognised Seasonal Employer Nelson-Marlborough Scheme Otago 13

Data sources • Statistics NZ (especially IDI) • Government agencies (MPI, MBIE, Immigration NZ) • Horticulture NZ • Pipfruit NZ • NZ Kiwifruit Growers Inc • • NZ Winegrowers 14

Model results Year end June 2018 2019 2020 2021 2022 2023 /19 /20 /21 /22 /23 /24 Maximum workers 27,408 27,800 28,154 28,464 28,797 29,462 available Workers needed 30,071 30,940 32,023 33,100 34,285 35,556 Difference -2,663 -3,140 -3,869 -4,636 -5,488 -6,428 15

Demand growing faster than supply 16

Sensitivity analysis Model (2016) Model (2016) new RSE cap Model (2018) Model (2018) WHS & Int Stud. 0 -2,000 Shortage of workers -4,000 -6,000 -8,000 -10,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 /17 /18 /19 /20 /21 /22 /23 /24 /25 17

Result by crop type Year end Low supply Mid case High supply Month of June 2018/19 biggest deficit Kiwifruit -2,536 -778 -11 April Pipfruit -2,840 -2,165 -1,481 March Summerfruit -1,543 -1,310 -1,078 January Wine grapes -2,116 -1,418 -715 July All 4 crops -5,880 -2,663 -2,018 April 18

Result by crop type – WHS & Intl stud. fall Year end Low supply Mid case High supply Month of June 2018/19 biggest deficit Kiwifruit -3,210 -1,590 -77 April Pipfruit -3,401 -2,763 -2,118 March Summerfruit -1,650 -1,424 -1,199 January Wine grapes -2,462 -1,848 -1,219 July All 4 crops -7,482 -4,493 -2,530 January 19

Labour deficit by region and crop Bay of Plenty: -1,590 Hawke’s Bay: -1,920 Nelson-Marlborough: -843 Otago: -80 Gisborne: -26 Hawke’s Bay: -499 Hawke’s Bay: -45 Nelson-Marlborough: -1,822 Otago: -925 Otago: -9 20

Other sections of the report • Accommodation • Transport • Training and education • Technology 21

How to improve the report? • Further work needs to be done to improve estimates of the level of contractor supply to reduce the uncertainty of the estimates. • Further refinement to improve the key assumptions in our model. • More comprehensive collection of data on accommodation and transport provided is required to provide a more informed view of the working conditions. 22

•Thanks 23