Labour Market Update - Mid-year blues?

Here we are halfway through the year, and as usual, we’re looking back over the past quarter to see what’s been happening in the labour market and recruitment space. 

The weather has definitely taken a chilly turn over the past few weeks, and it seems like temperatures in the labour market have taken a dip too. Economic times are still tough, and the Budget seemed to do little to promote positivity. That was reflected in our LinkedIn poll, which we ran just after the Budget, in which the majority of people reported feeling less optimistic than they had at the start of the yea,r and another group feeling just as worried as before.

Job ad numbers down again

At the end of the first quarter, we reported that job ad numbers seemed to be on the rise. That has not been the case in the second quarter where numbers seem to have dropped again.

Numbers from Seek show a month-on-month drop (May to April) of 2% with an 8% drop year on year. The glimmer of hope is that the year-on-year drop is the slowest decline we’ve had for some time –- so there may be some stabilisation occurring. And Wellington, which has borne the brunt of job market woes recently with public sector layoffs and hospitality and retail sector slumps, actually saw a rise in job ads year on year for the first time in two years. The consulting sector also saw a rise in vacancies, suggesting perhaps that organisations are looking to short-term contracts to fill gaps.

Low levels of job ads are also reflected in MBIE’s Jobs Online stats.

At Do Good Jobs, we’ve seen a good number of jobs listed this quarter, although not as high as in previous years. We’ve also seen several fixed-term or short-term roles advertised as organisations look to cover leave periods, complete specific projects, or work within funding constraints. Our listings remain varied in terms of organisations and sectors, seniority levels (although we are seeing a number of management and senior management roles advertised) and organisation size.

The data also showed that applications per job ad had jumped again. That, in turn, is slowing wage growth because employers have more choice of candidates and therefore are in a better position to negotiate.

Employment confidence remains low

The latest Westpac-McDermott Miller Employment Confidence Index showed a slight increase in the June quarter rising 0.5 points to 88.8. But it remains well below 100 which indicates that there are more households who are pessimistic about the outlook than those who are optimistic.

The levels have remained broadly the same over the past year. A perceived lack of job opportunities is a key concern and expectations for the year ahead were weaker than previous months.

Respondents were slightly more optimistic about job security, however those who found themselves out of work reported being unemployed for longer and it being harder to find a new job.

The Consumer Confidence Index was also under 100, sitting at 91.2, a rise in June after a previous dramatic fall.

Our working lives are getting longer

New data from Stats NZ shows we are starting work at a younger age and finishing later than we used to.

Data from the 2023 Census showed that teenagers were more likely to be in the workforce compared with previous censuses with 65.7% of people age 15-29 employed. Those in the 15-19-year-old group contributed most to the increase.

For those aged 65 and over 24.1% were employed in 2023 compared to 22.1% in 2013. This was driven by an increase in the number of over 70s in work. The gender divide of older people in work was also narrowing.

A quick Budget recap

May’s Budget seems a long time ago already. There was little in it to cheer about, and the big news just before Budget Day was that pay equity legislation was due to be reviewed and several in-progress claims scrapped. The slightly better news was that plans to change tax rules for charities were put on the back burner for now.

Here are some other highlights:

• The first funding of $190 million from the Social Investment Fund, overseen by the Agency, was announced.

• Another year of support for community-based food banks with $15m to be managed by the Ministry of Social Development (MSD), the New Zealand Food Network and partner agencies.

• An increase in funding for Māori Wardens, Pasifika Wardens and the Māori Women’s Welfare League, with a total of $ 14 million over 4 years

• Large investments to fund a range of primary and community health care improvements, including the expansion of urgent care and after-hours services.

If you missed any of the Budget detail you can read our review here.