WELLINGTON: A STORY OF ITS OWN

Public sector cuts are driving the bump in Wellington’s unemployment rate, experts say.

Unemployment in the Wellington region jumped to 7.6 per cent in November. Streamlining of the public sector had been a fairly constant theme over the past few years, but Wellington Employers’ Chamber of Commerce president Richard Stone said there was a mood of ‘‘cautious optimism’’ that the blood-letting was about to end.

‘‘Many businesses have had to make some tough calls that I think has positioned them pretty well for taking advantage of opportunities they hope will occur this year.

‘‘[Public sector cuts] will always happen, but I think we’re beyond the point where it’s going to happen in such a wholesale way.’’

The Wellington region’s technology and creative industries were looking in good shape, he said.

‘‘My prediction would be that [unemployment] will trend downwards but it won’t trend down quickly.’’

Wellington-based Council of Trade Unions economist Bill Rosenberg said the public sector cuts have had a morale-sapping effect on the Wellington region, and that had hurt confidence within the wider business sector.

‘‘There have been reports quite regularly of restaurants finding it pretty hard going and furniture shops finding it tough, that kind of thing.

‘‘You hear about quite low-level jobs with 70 or 80 applicants for them, so people are quite concerned about their prospects. Some have made plans – mortgages and that sort of thing – based on having a secure job.’’

Rosenberg disagreed the Government had finished taking the razor to its ministries, saying Wellington could be in for more pain this year.

It could also be hurt by local government’s march towards some form of amalgamated super-council over the next few years, he said.

‘‘The [Wellington] city council has just employed a new chief executive [Kevin Lavery] who comes from a background of cutting expenditure in the UK, and the council is obviously another big employer.’’