Labour Market Update - A more optimistic year?

So the summer holidays are over, and we are well and truly started on the year as we reach the end of the first quarter. As usual at this time of year, we’re taking a look over the last three months to see what’s been happening in the labour market and other developments that might impact the for-purpose sector.

In 2024, the first quarter ended on a low point with the country being back in a technical recession. This year, the news is more positive, with recently released figures from the 4th quarter of 2024 showing that New Zealand’s gross domestic product (GDP) rose 0.7%. That means the country is out of recession, at least for now.

But the prolonged tough economic times have taken their toll, especially in the for-purpose sector. The most recent casualty in the impact space is The Akina Foundation, which announced this week it would be closing at the end of April. In their closing statement, the Foundation’s team said: “The current economic and political environment has been extremely challenging for Ākina, and we know it has been for our wider ecosystem too. We do not believe things will improve quickly, and continuing to trade would not be responsible, nor ethical”.

2025 has started with a feeling of more optimism, but events, political decisions and other factors - both in New Zealand and overseas, now seem to be bringing some pessimism back to the fore. When we asked our LinkedIn community at the beginning of the year whether they were feeling more or less optimistic about this year compared to last, the majority were feeling more optimistic. Fast forward to this week, when we asked how people were feeling about the year so far - positive, negative or so-so, and the majority at the time of writing were in the so-so camp. Things still seem more positive than previous years, but it feels like there is still a way to go.

Some stability in the job market?

We’ve been seeing fluctuating job listing numbers at Do Good Jobs this quarter, with flurries of listings coming every so often. But on the whole, there does seem to be more movement in the recruitment space than in the previous few months. We are particularly seeing several leadership and higher-level positions being advertised - some newly created roles as organisations look to implement new strategies or improve existing ones. These provide exciting opportunities for those working in the for-purpose sector to make their mark and help to shape organisations’ futures.

That improving stability in job listings is reflected in the Seek data too, where job ad numbers rose 4% month on month in January and then only had a slight fall back in February, falling 2% month on month.

While numbers are still up and down, the past few months have shown more stability and are not showing the large drops that we saw during the past two years. So while we are not right back on track, we might be heading in the right direction.

That’s reflected in the latest Wespac McDermott Miller Employment Confidence survey  which showed confidence falling 3.3 points to 88.3 in the first quarter, reversing that gain it had made in the previous quarter. Respondents reported jobs were still hard to find in most regions, although the “expected job opportunities in a year’s time” figure did rise slightly.

New Zealand is losing workers overseas

Figures from Stats NZ released in February show that 2024 had a net migration gain of just 27,100, compared to a gain of 128,300 in 2023. The two main drivers were fewer non-NZ citizens arriving in the country, particularly on work visas, and large numbers of NZ citizens leaving.

The figures show that 72,000 NZ citizens left the country last year, with around half going to Australia. There have been plenty of news reports and anecdotal stories over the past few months of people heading overseas in search of better work opportunities and higher salaries, exacerbated by the recent public sector layoffs in Wellington. This could lead to shortages of skilled workers in the months or years ahead if people are not persuaded to come back or new skilled migrants don’t arrive to replace them.

Unemployment continues to grow

The unemployment rate rose to 5.1% in the December 2024 quarter.

The employment rate sat at 67%, with the largest drop in employment among men in full-time work, a reflection of the drop in job opportunities in male-dominated industries like trades. 

Interestingly there was a rise in the number of men in part-time work. The figures don’t tell us whether this is out of necessity (part-time work being all they could find, or all they are capable of) or out of choice. 

Disabled workers need more support

A new survey from Stats NZ found that 34 percent of disabled people with a paid job need more support or accommodations at work.

Workers generally had one or more of four unmet needs - the ability to vary tasks or work schedule, accessible building features at their workplace, modifications to their workstation or assistive equipment or technology support from others.

These workers also had lower levels of job satisfaction.

Is tax coming for charities?

One of the other big stories rumbling through this quarter was the suggestion that charities may start having to pay tax on some parts of their revenue.

This is an ongoing discussion, since Finance Minister Nicole Willis announced potential changes to tax expectations for charities would be coming in this year’s Budget.

Willis cited examples such as Best Start and Sanitarium, both large organisations with extensive business interests, as the type of organisation that might be impacted. But since the change was announced, there has been concern that smaller charities that operate some type of business arm, such as charities that run op shops, could also be affected.

IRD has been running a consultation on the proposals which ended this month. Watch this space for more on those changes.

Looking ahead to the new financial year

The end of March brings the end of the financial year for many organisations. That means it’s time to start planning for the new financial year. 

If your plans include recruitment, think about investing in one of our job packs. Job packs give you credits for 3, 5 or 10 listings at a discounted rate compared to buying single listings. And the credits are valid for a year. That means your recruitment is already budgeted for and the credits are available when you are ready to list a role. Buy a job pack.

We’ll also be keeping an eye out for the Budget in May and any announcements that come before the big day. Nicola Willis has already indicated in the Budget Policy Statement that extra funding will be limited to only the highest priority initiatives. That could have a knock-on effect on not-for-profits and NGOs who rely on government contracts or funding in order to provide services. We’ll have more on the budget and what it might mean in our second quarter update in June.