New Zealand’s job market may finally be turning a corner, with the number of filled jobs rising for the second time in three months and some of the hardest hit industries showing the first signs of steadying. The latest monthly figures from Stats NZ point to a labour market that has stopped sliding, even if few economists are ready to call the bottom just yet.
Filled jobs rose 0.3 percent in May, an increase of 2515 positions once seasonal patterns are stripped out, according to the Stats NZ monthly employment indicators. The annual lift of 0.7 percent was the fastest in more than two years. The figures were not all rosy, with April’s earlier reported gain of 0.2 percent revised down to a 0.1 percent fall, a reminder that the recovery is still fragile and prone to month to month wobbles.
Underneath the headline number, the picture splits sharply by industry. The public sector and the caring professions did the heavy lifting. Public administration added 6337 jobs over the year, healthcare gained 5728, education was up 3245 and financial services rose 3018. The broad services category added 1977 roles and even the battered goods producing sector managed a small gain of 242.
The losses landed where they have for much of the past two years. Professional services, manufacturing and administrative services all shed positions. Manufacturing has carried some of the deepest cuts of the downturn, and the wider goods economy has spent a long time treading water as firms held off on hiring while interest rates and weak demand bit into order books.
What caught the eye of forecasters this month was a tentative shift in the trades and the shops. Rob Heyes, a principal consultant at Infometrics, said there were signs that retail, wholesale trade and construction could have reached the bottom of their job losses. Those three industries have been among the most exposed to the squeeze on household budgets and the slump in building work, so any steadying there matters well beyond the official statistics.
Heyes was careful not to get ahead of the data. “We are heading in the right direction but I want to see a few more months of positive job numbers before I conclude we have seen the worst,” he told RNZ.
Westpac chief economist Kelly Eckhold offered a similar reading, describing a market that has stopped falling rather than one that is climbing. “We’re basically just bumping along the bottom of the labour market,” he said. Forecasts a couple of months ago had allowed for the Middle East conflict to hit the labour market harder than it did. “We could have potentially got weaker outcomes than this. It could have been worse.”
The caution comes down to maths. Even with jobs growing again, the pace is not fast enough to soak up everyone entering the workforce. Eckhold expects the unemployment rate to keep edging higher for a while yet, with most economists picking it to sit around 5.4 percent. “The unemployment rate is still expected to rise because even though we’ve probably got positive employment growth now, it’s probably not strong enough to outweigh the increase in working age population that’s just occurring naturally,” he said.
That gap between rising jobs and rising unemployment is one of the quirks of the current cycle. Migration and a growing working age population mean the country needs to create a steady stream of new roles just to stand still. When job growth runs below that level, more people end up looking for work even as the total number employed climbs.
The age breakdown shows who is feeling the pinch most. Jobs held by people under 30 fell 1.4 percent over the year, a sign that younger workers and recent school and university leavers are bearing the brunt of cautious hiring. When firms slow recruitment, it is often the entry level roles and first jobs that disappear first, leaving younger people queuing for fewer openings.
Geography matters too. The South Island outperformed the North Island over the past year, and Waikato stood out with annual jobs growth of 1.4 percent. The regional split lines up with the strength in the primary sector and food exports, which have been one of the few clear bright spots for the economy while the cities have leaned on softer construction and services demand.
The labour figures land alongside other mixed signals about how the recovery is tracking. ANZ economists this week tipped the Reserve Bank to lift the official cash rate three times before the end of the year, while warning house prices could still slip around 2 percent. Households, meanwhile, have been trimming discretionary spending, with fresh card data showing New Zealanders cutting back on dining out at the fastest rate since 1991 as confidence wobbles.
Put together, the snapshot is of an economy that has stopped going backwards but has not yet built up much forward momentum. For workers and employers, the question is whether the steadying in retail, building and wholesale turns into genuine hiring over the winter, or whether it proves to be another false dawn in a downturn that has already dragged on longer than most expected. The next few months of data, as Heyes notes, will tell the story.
What are you seeing in your own industry, are firms starting to hire again or still holding off? Share your experience 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 🙂
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