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Employment market goes cold

After some very strong years, New Zealand’s job market has markedly weakened according to analysis of almost 62,000 vacancies listed on Trade Me Jobs.
Posted on 23 April, 2019
Employment market goes cold

According to analysis of almost 62,000 vacancies listed on Trade Me Jobs for the quarter ending March 31, 2019, New Zealand's job market has markedly weakened. 

Head of Trade Me Jobs Jeremy Wade says there had been signs for the past nine months that the extremely strong job market was weakening but the sudden decline in the first three months of 2019 had been a “surprise”.

“New job listings were down 6.1 per cent year-on-year this quarter, that’s the first drop we’ve seen in the past 10 years."

“Our data shows that the private sector job market peaked around the start of 2018 and there has been a significant (5-10 per cent) tail off since then. The decline in business confidence is now reducing new hiring” 

Wade notes that employer caution is reducing new listings and advertised wages, despite difficult filling vacancies.

“Salaries were up just 1.1 per cent year-on-year this quarter," says Wade. “This is having a knock-on effect in terms of how long it takes to fill positions too. Without higher wages, there’s little incentive for skilled job hunters to jump ship. 

“The numbers we’re seeing suggest that this slow wage growth is likely to continue for the rest of 2019.” 

Wade also says that despite the decline in listings, the talent shortage remains.

“New Zealand’s talent shortage is a structural problem and is not resolved with a decline in the number of jobs on offer. Unfortunately, there are still sectors where the demand for skills outstrips supply, which requires better long-term planning and investment by Government and Industries."

According to the analysis, the weakness in job vacancies is concentrated in the main centres: Auckland and Canterbury were down 13.1 and 10.3 per cent respectively while the Wellington region was up just 0.3 per cent. 

“Auckland has driven much of the downturn we’re seeing. The start of 2019 has been brutal for the Super City’s employment market. As well as listings being down, average pay has dropped (down 0.3 per cent). 

“Auckland’s dip has been spectacular in just how suddenly it’s come about. Auckland employers appear to pessimistic rather than just cautious about the future and they’re battening down the hatches. It could be an interesting year.” 

Meanwhile many of the smaller regions many saw jumps in vacancies. Gisborne up 36.9 per cent, Hawke’s Bay up 15.1 per cent, Southland up 14.5 per cent and the West Coast up 23.1 per cent all saw impressive jumps in listings.

However, Wade warns that this could be a temporary state of affairs as the Auckland knock-on effect could spread in the coming months and years. 

“Over two years ago we saw Auckland growing strong and that gradually flowed through to the regions. While the regions continue to hold strong, we’re concerned how they will be impacted in another year or so."

“We will watch with interest whether stimulus from the Provincial Growth Fund enables the regions to buck the trend. We tend to see a lag of over a year before the regions are impacted. In the absence of any other stimulus, we’d expect the regions to also decline in the near future.

“We’ll be watching to see how this apparent downturn impacts the other sectors over the rest of the year and beyond.” 

IT still the most lucrative career “IT roles continue to dominate the highest paying roles on Trade Me Jobs, taking out the top five spots,” said Mr Wade. 

IT architects topped the list with an average pay of $155,530 followed by IT project management roles earning an average wage of $149,759. 

“While the IT sector saw a 4 per cent drop in vacancies compared to this time last year, there’s still demand from employers and they’re willing to pay top dollar to lure people to change employers.”