Labour Market Update - Q3 - another turbulent three months

We’re at the end of the third quarter - just three months of the year left to go. It’s been another turbulent period with the economy showing signs of recovery, but not as fast or as much as we might like.

As is our custom around the beginning of each new quarter, we asked our LinkedIn audience how they were feeling. Cautiously optimistic was the answer. Last year, people were saying “survive to 2025”, and early this year, there was a bit of “thrive in 2025”. Now it seems to be more a case of hanging in there again. The mantra gaining popularity in recent weeks is: “stay in the mix until 2026”. It’s not quite so catchy, but maybe six is harder to rhyme with!

Overall, confidence is “meh”

In general, the economy has taken a bit of a nosedive in recent months. 

Figures released this month by StatsNZ for the June quarter (the most recent available) show the economy shrank, with GDP dropping by 0.9%. Westpac senior economist Michael Gordon described that as “substantially worse than expected” while Kiwibank said the economy didn’t just stall over the June quarter; it slammed into reverse”.

Since then, there have been signs that things are picking up again, but uncertainty remains and both domestic policies and global issues, such as US tariffs and ongoing conflicts, continue to have an effect.

Other measures of confidence reflect the current mood. 

Business NZ reported that the Performance of Services Index (PSI)which shows the state of the services sector (a sector that makes up a large proportion of the economy) was down again in August, falling to 47.5. Anything below 50 shows the sector is contracting. The proportion of negative comments from respondents was also up month-on-month, although lower than in June.

The Westpac-McDermott Miller Employment Confidence Index rose to 89.9 in the September quarter but remains close to the lows seen during the Covid pandemic. A perceived lack of job opportunities and low job security are listed as concerns among Kiwis.

In contrast, the Consumer Confidence Index dropped to 90.9, down 0.3 points. The job market, house prices and increases in living costs were cited as concerns despite the fact that interest rates have been falling. Just over 40% of respondents said that their financial position has deteriorated over the past year.

Job ad numbers are up

On a more positive note, job ad numbers seem to be on the way up again, with rises seen in many regions and across a range of sectors.

Latest numbers from Seek show a 1% rise month-on-month and a 4% rise year-on-year - the first time there has been year-on-year growth since 2022.

But job applications also rose to another all-time high, so competition for the available jobs remains high.

At Do Good Jobs, we’re continuing to see fluctuating numbers of job ads over the quarter, although we are seeing a reasonably steady stream of new roles, including several with employers new to the job board. We continue also to see a reasonably high number of volunteer roles. Whether this is simply part of a cycle or evidence of for-purpose organisations trying to do more with less money is hard to decipher.

Early results from our jobseeker survey show that there are good numbers of active jobseekers in the market, with around 60% saying that they are looking for new roles all the time, and most using our job board weekly or daily.

Workers are looking for stability and balance, and worried about their situation

The annual Jobs Report from HR and payroll company Employment Hero,>>LINK TO << shows workers in Australia, New Zealand, the United Kingdom and Canada are looking for balance but struggling with the cost of living and instability.

The report found that nearly half of employees were worried about finding a new job if they lost their current one, and around 30% were working more than one job to make ends meet.

Many employees, especially Gen Z, were looking for roles that offered job security and less pressure and responsibility. Balance over burnout was a key theme from respondents.

Gender pay gap at an all-time low

One more positive piece of news to be made public during Q3 was that the gender pay gap fell to a new low during the June quarter.

Figures from StatsNZ show the pay gap was at 5.2% - the lowest since records began in 1998.

The change has been brought about by an increase in the median hourly earnings for women, with reports that pay increases in some sectors such as education, public administration and financial services have contributed to the change.

New Reserve Bank Governor announced

The final piece of news this quarter won’t have an immediate impact, but will be interesting to keep an eye on over the coming months.

Dr Anna Breman, currently deputy governor of Sweden's central bank, the Riksbank, has been named new Governor of the Reserve Bank and will take up her position in December. She is the first female to lead the Reserve Bank in its history.

The appointment has been met with a mixed reaction so far, but it will be interesting to see the approach she takes once she steps into her new role.