Canterbury businesses grappling with crippling labour shortage

Canterbury businesses are struggling to deal with a crippling labour shortage as workers leave the region’s labour market faster than it can attract new talent.

Lincoln University economist Dr David Dyason has spent 18 months researching the issue and found Canterbury will need 10,000 new workers a year to fill the labour gap in the region.

He says the biggest shortfall is expected next year, as the aging workforce and the closed borders create a perfect storm.

“What we're getting is the tail end of the baby boomer generation leaving the labour force market.

“As you have people moving out and leaving the labour force, the next group coming in on that same age group is not as big as the previous one leaving and that is the problem, we don't have anyone coming in.”

Before the pandemic, 80 per cent of Canterbury's population growth was people from overseas.

The border closures have made replacing staff very difficult.

Christchurch NZ’s economist Jorge Chang Urrea says “it’s quite dire”.

He says they’re getting reports from multiple industries suffering major consequences because of the labour shortage.

“This is across the board. We're talking about engineering, tech, agritech, manufacturing, all kinds.”

He says Christchurch’s economic growth is behind the increased need for staff.

“A lot of companies are grasping to get hold of the correct people with the correct set of skills.”

Large Christchurch family business Hamilton Jet, which makes water jets for small and large vessels across the world, is having to redeploy office staff to the factory floor for short stints because they’re struggling to find enough staff.

Managing director Ben Reed says “we're finding that people we used to be able to pick up through agencies quite easily we just can't get, either the number or quality of folks that we used to”.

He says their factory is currently 20 workers short.

“We've been struggling to stay on our production schedule.”

“To have high demand but the inability to supply, that's like the worst of both worlds. It's tough.”

Dyason says the issue is driving up wages and the main concern is productivity.

“For New Zealand and for Canterbury, we have had low productivity growth in the last couple of years and this is not going to improve it.”