A government ministry is predicting the unemployment rate will recover from a surprise jump in the last quarter and start declining early next year.
The Ministry of Business, Innovation and Employment in its Quarterly Labour Market Report tips the unemployment rate, which unexpectedly rose to 7.3 per cent in the September quarter, will fall by half a percentage point by March next year.
That would put it at the level it was at before the September spike and the report anticipates it will drop to 5.9 per cent by March 2014 and fall a further 0.4 per cent the next year.
It expects strong employment growth in primary processing, construction and utilities sectors.
The Canterbury rebuild is expected to be the catalyst for much of the jobs growth.
The number of Kiwis leaving for Australia, 48,600 for the year to September, is forecast to remain at high levels for the next few quarters as a rise in the number of arrivals will not be enough to offset the number of departures.
The annual net migration loss from New Zealand to the rest of the world, currently at 3300, and in negative territory since October 2011 will remain that way until 2014, the report says.