Tony Alexander, Chief economist at the Bank of New Zealand.

I have been travelling extensively around the country over the past few weeks giving talks about interest rates, the exchange rate, the housing market, and why businesses should try to enjoy the recession because it has provided the best opportunity to source scarce labour in a great number of years.

The main thing learnt in these travels is that there is a complete absence of anger about the state of the economy. 

This stands in stark contrast to previous downturns when people were often jumping up and down about the Government, Reserve Bank, Treasury, economists, financial institutions, overseas marketers of their primary products, regulatory authorities, and pretty much everybody except themselves.

It’s almost as if there is a realisation that recessions never last and there is always an upturn. Perhaps there is also a realisation that the long-term prospects for New Zealand now look better than they have been since perhaps any time since the start of the Korean War boom in the 1950s.

The world population is growing rapidly, food availability overseas is diminishing as biofuel production increases, and rising household incomes are leading to increasing demand for protein and processed food and beverages.

New Zealand is very well positioned to take advantage of these important overseas trends and even global warming is perversely good for us with more land coming into viable production over the next 50 years.

Perhaps a second interesting thing one has discovered however is that in the farming sector there is no recession as such when it comes to easily sourcing labour.

In particular in areas where dairy conversions have been proceeding rapidly such as Southland there is a continuing dire shortage of experienced willing employees.

Farmers are bringing in as many people from the Philippines as they can but are still having to pay more than they would like for local experienced labour.

While there are a number of farmers moaning about the high prices they now have to pay for people they perhaps should keep in mind that as the major beneficiaries of the basic interaction of demand and supply forces overseas – higher dairy prices – they should not begrudge those same forces helping to spread the dairy boom into other parts of the economy through higher incomes for dairy workers.

Speaking of the labour market, the unemployment rate this recession has so far risen from 3.4% to 3.9% and it could go as high as 5% though the chances it will hit the 6% forecast by the Reserve Bank seem exceedingly low.

Employers seem completely aware that there is a structural shortage of labour in New Zealand and although they are laying off some people at the moment in order to get cash flows under control a close eye is being kept out for good employees other companies may make available.

In fact one of the key recommendations in my talks is that employers take advantage of this current temporary weakness in the labour market to secure good people.

Once the cyclical upturn in the economy starts producing above average growth over 2010 and perhaps even from late 2009 the unemployment rate could easily head back down again very quickly.