New Zealand added more than 4000 jobs in April, the second month in a row that the number of filled jobs has climbed, but almost all of the growth came from a single corner of the economy. Figures released by Stats NZ on 28 May show the country gained 4333 filled jobs between March and April once the data is seasonally adjusted, a rise of 0.2 percent. Compared with a year earlier, jobs were up 0.5 percent, which is the fastest annual rate of increase in two years.
On the surface that looks like a labour market quietly finding its feet after a long flat patch. Dig into the detail and the picture is far more lopsided. Healthcare and social assistance did most of the heavy lifting, adding 5527 jobs over the year. Transport, postal and warehousing was next with 2386, followed by agriculture, forestry and fishing on 2248. Take health out of the equation and the rest of the economy is barely treading water.
That becomes obvious in manufacturing, which suffered the biggest fall of any sector, shedding 3238 jobs. The goods-producing part of the economy as a whole managed a gain of just 288 jobs, or 0.1 percent, while the primary sector added 411, or 0.4 percent. The services sector, which is by far the largest employer in the country, added 3650 jobs. In other words, a chunk of the headline gain in services is really the health system expanding, paid for by the taxpayer, rather than private firms taking on new staff.
There is a clear regional pattern too. According to Stats NZ, the South Island accounted for the bulk of the rise in filled jobs, while the much larger northern labour market was comparatively subdued. That fits the run of recent data showing the South Island economy, helped along by tourism, dairy and a strong run of primary exports, holding up better than the big urban centres of the North Island.
The most worrying line in the release sits underneath the cheerful headline. Jobs held by workers aged 30 and under fell 1.5 percent over the year, the 33rd month in a row that the figure has dropped. That is a striking run. It means young New Zealanders have been losing ground in the jobs market, in a fairly unbroken line, for the better part of three years. Older workers are holding on to their roles and, in many cases, staying in work longer, which leaves fewer openings for school leavers and recent graduates trying to get a foot in the door.
Economists were quick to warn against reading too much optimism into two good months. Infometrics principal consultant Rob Heyes told RNZ that the recent gains were probably the lagging result of decisions taken some time ago. “The job gains we are seeing in March and April are probably based largely on hiring decisions made in January and February, perhaps even late last year,” he said. The implication is that the figures tell us more about how employers were feeling at the start of the year than about how they feel now.
His colleague, Infometrics principal economist Nick Brunsdon, pointed to another sign that the market is far from healthy. Quarterly job turnover, a measure of how often people move between roles, has fallen to its lowest level on record at 12.8 percent, down from a peak of 15.5 percent in the middle of 2023. When turnover is low it usually means workers are nervous, holding on to the job they have rather than chasing a better one, and that employers are not creating many new positions for them to move into. A frozen jobs market can look stable in the headline numbers while feeling deeply stuck to the people inside it.
All of this lands against a darkening backdrop for the wider economy. Westpac has warned that while New Zealand should avoid slipping back into recession, the year ahead will be a rocky one of weak growth, rising prices and a softening jobs market. The bank expects growth of only around 1.5 percent in 2026 and forecasts the unemployment rate climbing towards 5.6 percent as firms put hiring on hold. Chief economist Kelly Eckhold said in the bank’s outlook that “the outlook for the economy has changed materially in recent months”, with cost of living pressures intensifying as global fuel and energy prices climb.
Higher fuel costs are the wild card. Westpac estimates the surge in petrol and diesel prices could add a full percentage point to headline inflation, which it expects to peak around 4 percent in the June quarter and stay above the Reserve Bank’s target band well into 2027. That matters for jobs because it changes the path of interest rates. The Reserve Bank held the Official Cash Rate at 2.25 percent at its most recent decision, on the Governor’s casting vote, but signalled that the next move is more likely to be up than down. Higher borrowing costs would weigh on the very firms most likely to be hiring.
So the April jobs figures are best read as a snapshot of a labour market that is firmer than it was, but narrow and fragile underneath. The growth is real, and a rising headcount is better than a falling one. Yet it leans heavily on a publicly funded health sector, it is concentrated in the South Island, and it is being delivered to a market where young people keep losing jobs and almost nobody is changing them. The next few months, once the effect of higher fuel prices and the interest rate outlook works through, will show whether the recovery has any depth or whether these were simply the last orders from a more confident summer.
What are you seeing in your own industry or town, are firms hiring again or holding their breath? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
Leave a Reply