16 May 2013

Warning of labour market shortages

7:07 am on 16 May 2013

AWF Group's profit has more than doubled to $6.9 million in the year to the end of March, but it is warning that the next year will be more challenging as the labour market tightens.

The labour agency's profit rose to $6.9 million, from $2.6 million last year, with sales rising by a quarter to $130 million.

Excluding the impact of the sale of Panacea Healthcare, underlying earnings rose 17.5% to $5.4 million in the year ended March.

The company, which places around 3000 workers a day in temporary employment, says all sectors are growing strongly in an economy where demand is high for casual staff.

Chief executive Mike Huddleston said the drought slowed activity in rural regions, Wellington has picked up, while Christchurch and Auckland showed strongest growth.

But Mr Huddleston said the firm is facing the tightest labour market in five years.

He said there is plenty of demand for temporary labour but New Zealand lacks skilled staff so finding them is going to be the company's biggest challenge.

Mr Huddleston said there is an across the board shortage of skilled staff.

In the construction sector the shortage includes everything from carpenters, to electricians and plumbers to machine operators, drivers, engineering fitters and welders.

In the last two months, the company has been to Britain and attracted a number of workers from England and Ireland, although the number is expected to reduce by the time they go through the visa application process.

Mr Huddleston said the company is also refocusing on apprenticeships in New Zealand and looking to take young trained people from the technical institutes and into apprenticeships.

He said the skills shortage will slow the market down and things will take longer in Christchurch, as well as leading to a shortage of skilled workers in Auckland.

Mr Huddleston said it's already difficult to get trades people in Auckland and as Auckland's market improves any additional trades people are likely to find work there rather than shifting down to Christchurch.

Despite the tight labour market, he expects AWF's profit to rise next year and the company will continue to look for new acquisitions.

The company will pay a final dividend of 18.6 cents per share. Shares in AWF rose 6% to $3.40.