January – March 2024

Analysis

• 2024 has started where we ended in 2023 with a further substantial decline in online job postings. The New Zealand Jobs Index fell 17.0% in the last three months. Falls of this magnitude are rare in any employment market.
• New Zealand has managed three double-digit declines in four quarters!             
• The accumulated decline over twelve months is a staggering 42.3%.
• The employment market has been shrinking since the end of COVID-19.
• Recent political upheaval has taken a business community, already rattled by high inflation and rising interest rates, into an even more precarious position.
• In economic speak, this is undoubtedly a “hard landing”.

This has, however, not translated to a massive rise in unemployment. At least not yet. 

The latest quarterly data (December 2023) saw unemployment rise to 4.0%, up 0.6% over the calendar year but still well below rates of unemployment of over 5% and 6% seen in the past. This is because the market has fallen from an extraordinarily high level immediately following the end of Covid restrictions. Employment rose in January and February because net migration is among the highest on record (Stats NZ March 2024).

The trends between Permanent and Flexible job opportunities are surprising. 

In the March quarter Flexible job postings fell 19.8% while Permanent fell 16.4%. 

The gap is wider year-on-year – the Permanent Jobs Index is down 39.9% and the Flexible Jobs Index is down a massive 51.4% – a halving in twelve months!

Traditionally, in a weak employment market, employers shift towards Flexible job offers in case business conditions deteriorate further. Not this time! If employers are hiring, they are still favouring permanent employment. The reason? Recent experience with acute skills shortages means employers still want to lock in scarce talent.

Job Trends by Industry

Quarterly change in NZ Jobs Index by Industry (1)

• All four sectors fell in Q1 2024. Declines in four of five sectors exceeded 20%. Even Health Care.
• While talent shortages certainly remain employment in the sector rose by nearly 5% in the twelve months to January 2024 (NZ Stats Employment Indicators Feb 24).
• Net Migration is starting to ease some of those shortages.
• Vacancies in Public Administration have fallen for four consecutive quarters.
• The cumulative decline is a staggering 66.7%. The 21.9% decline in Q4 was an improvement on the prior quarter. 

Severe cutbacks in Government hiring and the curtailment of some major projects are having a major impact nationally, with Wellington particularly hard hit. Only Education and Training performed relatively well – down “just” 5.9%. Improving international student numbers, and creating training places in the trades to alleviate skills shortage will help the sector stabilise in 2024. 

It remains fragile by historical standards.

High inflation and rising interest rates are hurting discretionary spending.

This flows directly through to sectors such as Accommodation and Food Services. 

Demand remains very volatile. A 22.7% decline in the last quarter suggests a tough year ahead for job seekers in a sector characterised by many small businesses and casual employment arrangements.