NEW ZEALAND – The Jobs Report, April – June 2023

Severe jobs market decline

New Zealand Jobs Index

Chart 1: New Zealand Jobs Index (seasonally adjusted)

Analysis

• In the June quarter on-line job postings declined by a massive 10.8%. In the previous quarter we reported an encouraging stabilisation. Clearly the employment market has shifted downwards substantially in the last three months.
• The unemployment rate is currently 3.4%, unchanged from the prior quarter. Likewise, employment rose to 2,886,000 in the March quarter. Job postings are a lead indicator of employment. It is likely that unemployment will rise in the next quarter.
• While recruiters do report a decrease in activity they report that the market remains strong – a more balanced jobs market compared to the acute skills shortages reported in 2022. Job postings are 23.7% lower than a year ago. Inward migration has helped supply of talent.
• Flexible work was worst affected falling a staggering 25.0%. A rise was reported in the prior quarter. Casual work for school leavers and graduates has eased considerably. There may be some statistical correction taking place, but the decline is significant by any benchmark. By comparison Permanent job opportunities have fallen just 7.0% over the same period.

Job Trends by Industry

Chart 3: Quarterly change in NZ Jobs Index by Industry (1)

• We have observed a significant decline in job postings for Accommodation and Food Services. It would appear that tougher economic conditions have decreased expenditure on entertainment and dining out. Tourism is still in recovery but less buoyant in winter months.
• Education and Training has also taken a big hit, falling 21.8%. The sector was particularly hard hit during the pandemic, enjoyed a modest recovery as overseas tourists returned and employers used training to address skills shortages. Demand remains very weak.
• The only bright spot was Public Administration, the only sector to record growth, albeit just 1.6%. Work in the Public Sector is traditionally considered a “safe haven” in tough economic times. With the General Election set for October job posting are likely to retreat in the immediate future.
• Professional, Scientific and Technical recorded a contraction of 12.3%. Job postings have been weak for some time but the fallout from the PwC saga in Australia has the “Big Four” treading very carefully in the region. As major employers in Professional Services in New Zealand this will affect job posting numbers until confidence returns.

Quarterly job changes by industry (2)

Chart 4: Quarterly change in NZ Jobs Index by Industry (2)

• Within this cohort all sectors contracted by over 10%. The only exception to this was Retail and Wholesale which recorded a fall of 8.9%. It also performed surprisingly well in Q1 2023.
• The 16.8% fall in Mining, Construction and Utilities was to be expected. Business conditions and confidence in the Construction sector have been very weak. This is the third consecutive quarterly fall in job postings.
• The situation is hardly better in Manufacturing and Distribution and Financial Services. Job postings fell 16.6% and 15.5% respectively. Both have been trending down through much of the past twelve months. Employers are finding it hard to pass on cost increases, particularly wages and salaries, onto customer, so reducing new hires.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 5: Quarterly change in NZ Jobs Index by occupation

• It’s been a surprisingly strong quarter for Health, Education and Community Professionals. The growth was principally in Health and Community. Healthcare has been quite uneven sine the “boom” of the pandemic. The opening up of international borders has helped supply in many key occupations but shortages persist.
• The most significant decline was in Technology. Demand for Technology Professionals has been decimated by the withdrawal of startup funding by Venture Capital. Projects that cannot demonstrate a commercial outcome are being abandoned. Contracts are being terminated early or not renewed. This sector has tended to pay top dollar too, so contract rates are in decline.
• Job postings for Business Professionals fell 1.1%. 2023 has actually been net positive reversing a significant downward trend in late 2022. Top level Executive roles however continue to soften, down a further 14.3%.

Quarterly job changes by Occupation – Non-Professional

Chart 6: Quarterly change in NZ Jobs Index by Occupation

• All Occupational Groups in this cohort fell substantially in the last three months. All saw double digit decline except Sales roles which fell “just” 6.0%. Sales was also relatively strong in Q1. Strength in the Retail sector will have cushioned the fall in other industries.
• The sizeable falls in Trades and Technicians and Labourers, Drivers and Operators is consistent with the declines seen in Agriculture, Manufacturing and Construction. Both have fallen three quarters in succession.
• The substantial fall in Service and Community Worker job postings is harder to fathom. Q1 was strong. Overseas recruitment campaigns and local retraining may now be bearing fruit in key occupations such as Aged Care and Child Care.

Job Trends by Region

Quarterly job changes region

Chart 7: Quarterly change in NZ Jobs Index by Region

• Wellington and Canterbury suffered the largest declines, 21.1% and 20.6% respectively. Both had enjoyed a relatively strong but short-lived start to the year.
• With nearly 40% of the total job vacancies posted nationally Auckland Region really is the bell weather guide for the nation’s employment prospects. It fell 11.0%, in line with the national norm.
• “Other Councils” represents thirteen smaller regions where job posting volumes are very low. The net fall was 0.2% but there is enormous variation between regions. Gisborne and Hawke’s Bay both reported strong growth reversing big falls in Q1. Otago was the weakest, reporting a fall of 14.1%.

About The Jobs Report

The New Zealand Jobs Index is a measure of where job postings exist in the New Zealand employment market. Data is collected from employer, recruiter and niche job boards across New Zealand. Repeat advertisements on one site or across multiple sites are de-duplicated to avoid double counting. Artificial intelligence is used to code every job advertisement into a wide range of key fields from which detailed analysis is possible.

The charts, data, detailed analysis and commentary on the Jobs Report and Jobs Index are developed by Hro2 Research. Raw data is seasonally adjusted and trended using X-13ARIMA then indexed by Hro2 Research. These services are provided to RCSA under license.

Raw data is provided under license to Hro2 Research Pty Ltd by Lightcast. All data in this report is Seasonally Adjusted. Trend analysis was suspended during Covid 19.