Contact us

New Zealand Labour Market Insights Report

17 October 2021

Volatility becomes the norm as the jobs market swings

The re-imposition of lockdowns led to a sharp drop in job advertisements across New Zealand during August.

New Zealand Q4 Labour Market Insights 2021

The emergence of the COVID delta strain brought an end to the five-month run of record-breaking job ad numbers across the country, as shown in the latest SEEK employment report.

There was a 12% drop in job ads from July to August, however, despite the fall, job ads were still up 11% compared to a year earlier.

It has been a tumultuous time for employment, with all regions and all sectors feeling the impact of rapid swings in business activity and recruitment.

For the past few months, it has become harder for employers to find the skilled people needed.

The unemployment rate dropped sharply to 4.0% in the June quarter (down from 4.6% in the March quarter), equalling the lowest level since 2008. There was also a record decline of 12.4% or 17,000 people who were unemployed.

Not surprisingly, employers faced growing difficulty recruiting, and surveys show that labour shortages were a significant constraint on business expansion. Another sign of the tightening labour market is the increase in labour costs. Private sector wages were up 0.9% in the June quarter and 2.2% over the year. Average hourly earnings were also up 4.5% year-on-year.

Download the full report here.

Key Takeaways

  • The COVID Delta strain brought an end to the five-month run of record-breaking job ad numbers across the country
  • 12% drop in job ads from July to August
  • Unemployment rate dropped sharply to 4.0% in the June quarter, equalling the lowest level since 2008
  • Swings in business cucles that normally span years are being compressed into months
  • SEEK’s employment report shows start decline in job ads across teh coutnry between July-August
  • Long-term employment outlook shows need for approx. 47,000 more workers each year to 2026

“There’s no denying New Zealand’s labour market has been impacted over the past 18 months. We have analysed the data available to provide greater clarity on the status of New Zealand jobs and trends and while the impacts of COVID and related lockdowns have again challenged New Zealand industry in 2021, importantly there is cause for optimism in 2022.”

Nic Fairbank, CEO – Programmed Staffing, Training Services and PERSOLKELLY ANZ

This is not ‘normal’

What’s important to remember is just how extraordinary all of this is.

Everyone recalls the catastrophic drop in jobs when the pandemic first hit in early 2020. But what was equally surprising was the rapid pace of recovery as businesses resumed and employees who had been laid off were re-engaged. In fact, the pace of the economic recovery during 2021 quickened to the point where demand for workers surged and job vacancies were well above pre-COVID levels. Closed borders added to labour market pressures as employers who would normally bring in overseas staff, especially for agricultural and seasonal work, were unable to do so.

All of this was taking place with the labour force participation rate – the percentage both working and looking for work – at a strong 70.5%. By comparison, the participation rate in Australia sits around 65%. This tells us that the New Zealand labour market, up until recently, was as tight as a drum – hard to recruit staff, little spare capacity, no net migration and wages rising as employers competed for the available talent.

Then, in August the reintroduction of alert level 4 lockdowns across the country, swung the pendulum, resulting in the big drop in job ads, discussed earlier.

This is a level of volatility that few employers will have experienced. Swings in business cycles that normally span years are being compressed into months. Businesses are being forced into sharp, often heartbreaking, decisions about staffing and continuity. SEEK’s employment report shows the stark decline in job ads across every part of the country between July and August as the lockdowns took effect.

NZ Job Ad percentage by region (August 2021 vs July 2020)

The industries with the sharpest downturns were Trades & Services, down 18%; Hospitality & Tourism, down 29%; Manufacturing, Transport & Logistics, down 13%; and Retail & Consumer Services, down 18%.

The turnaround is likely to be rapid

There has been some slight easing of restrictions across the country since August, although Auckland remains on a higher level of alert. It’s hard to imagine any significant economic bounce in the near term, with most of the country still in the grip of lockdown and the biggest city grappling with new COVID cases.

What provides some encouragement is the very rapid pace of recovery that flowed from the experience in 2020 once restrictions on business were lifted. This was also mirrored in Australia where the turnaround was far quicker than predicted.

Together, Programmed and PERSOLKELLY are the leading providers of staffing, operations and maintenances services across Australia and New Zealand and one of the largest workforce solutions providers in the APAC region.

From market-leading staffing programs to advanced people management, innovation and technology; we support your business to navigate and stay ahead of the rapidly changing world of work. 

Together our experienced, capable team of problem-solvers will help you achieve more.

If you would like to speak to a Programmed representative, please call us on 0800 453 559.

Keep reading

More news
New Zealand Budget Summary, 2024-25

The first Budget of Finance Minister Nicola Willis has foreshadowed a period of severely constrained economic activity and higher unemployment. More

Waiheke Island’s Newest Gem: The Pumptrack at Tawaipareira Reserve

At Programmed Facility Management New Zealand, community enhancement is at the heart of what we do. That’s why we’... More

Knowing What to Maintain: Identifying and Prioritising School Maintenance Needs

The Significance of Maintenance Maintenance encompasses a wide range of tasks, from routine inspections to extensive repairs, all with the... More