Filled jobs decline 0.1% as revisions show flatter trend
New Zealand’s labour market remained soft in April, with filled jobs slipping 0.1% from March, according to Stats NZ’s Monthly Employment Indicator (MEI).
Revised figures also showed previous months were overstated by 0.3%, reinforcing a flat-to-declining trend in job growth.
“The Monthly Employment Indicator (MEI) dipped by 0.1% in April, broadly in line with what we expected,” said Michael Gordon (pictured left), senior economist at Westpac NZ.
“There was a combined 0.3% downward revision to previous months, leaving the recent trend in jobs looking flat to slightly downward.”
Gordon noted that the Easter and Anzac Day holidays may have temporarily distorted the April data.
Construction and business services drag, while health and education grow
Sector trends were uneven. Construction and business services recorded the steepest job losses, while employment in health, education, and mining ticked upward.
“No other sectors are showing a clear trend one way or the other, aside from a lift in jobs in the relatively small mining sector,” Gordon said.
ASB: Diverging sectors show a two-speed economy
Nick Tuffley (pictured right), chief economist at ASB, said the MEI data reflected expected softness and highlighted a growing divide between sectors.
“The data April filled jobs fell 0.1%, broadly in line with expectations…,” Tuffley said. “The sector details showed sector differences, reflective of the two-speed nature of the NZ economy.”
In more detail:
- Primary sector jobs rose 0.1% in April, marking a third consecutive monthly gain.
- Goods sector employment fell 0.3%, with annual losses of 6.5% in construction and 2.3% in manufacturing.
- Services sector jobs eased 0.1%, with sharp declines in administration (-6.7% y/y) and retail (-1.5% y/y).
Youth and men most affected by job losses
Young workers and men continued to bear the brunt of labour market weakness, Tuffley said.
The 15-19 age group recorded a steep annual decline in employment, down 10% year-on-year. Job losses have also been more pronounced for men (-2.2% y/y) than for women (-1.3% y/y).
North Island hit harder than South in regional job losses
The North Island recorded the largest regional job declines, with urban centres worst affected.
Annual job losses were significant in Auckland (-2.1% y/y) and Wellington (-2.4% y/y), with declines also observed in several regional North Island centres. In contrast, South Island regions were more resilient, with Canterbury down just 0.4% and Otago posting a modest gain of 0.2% year-on-year
Hiring outlook remains subdued despite easing monetary policy
Tuffley said businesses are still hesitant to hire, and this trend is expected to persist through 2025.
“We expect hiring to remain patchy over much of 2025, with firms likely to remain gun shy on expansion plans given the uncertain environment,” he said.
However, low labour force growth may help contain the rise in unemployment. A gradual pick-up in activity later this year could support renewed hiring.
“Recovering base economic momentum later in 2025 should see a pick-up in hiring and then see the unemployment rate recede before year end,” Tuffley said.
OCR cuts expected to support jobs market
ASB expects the Reserve Bank (RBNZ) to cut the OCR by a further 75 basis points, bringing it to 2.75% by year-end to help stimulate the economy and support the labour market.
However, if employment proves stronger than expected, the pace of easing could be scaled back.
“A more resilient than expected labour market backdrop could see the RBNZ temper the future pace and extent of policy easing,” Tuffley said.
