Jobs drought expected to continue in 2025

It’s been a tough year for job seekers. As the job market weakened and unemployment rose, many job seekers reported finding themselves up against hundreds of other applicants.

Even though the economy is expected to improve next year, there is a warning: Things will likely remain tough for applicants for some time to come – and more people may choose to move abroad in their search for a job. work.

Shay Peters, managing director of recruitment firm Robert Walters, said a significant number of New Zealanders were seeking job opportunities in other countries in recent times – and this was likely to continue, at least in the short term .

“It’s no secret that the job market in New Zealand is currently pretty dire. The fact is, there simply aren’t enough job prospects and opportunities to keep people here. number of Kiwi candidates looking to settle, particularly in Australia.

He said the company’s Australian offices had seen an unprecedented number of New Zealand candidates inquiring about job opportunities in Australia. He added that this situation was likely to continue and even intensify in the coming year.

“Lack of opportunities and inadequate wages in New Zealand are driving people to seek employment overseas. This is a worrying trend that could impact the country for many years, as it risks losing a significant number of highly skilled people, potentially for the long term. -term.”

Seek said that while demand for most positions had declined over the course of 2024, some were bucking the trend.

“Aged and disabled carers are one of those roles for which adverts have been growing since before Covid and have been relatively stable in recent years. There is also still demand in information technology roles, such as programmers and systems analysts, although demand has slowed significantly for a very long time. high levels in recent years.

Mike Jones, chief economist at BNZ, said tough labor market conditions were likely to extend into 2026.

“We believe the unemployment rate will rise further and could peak at just under 5.5 percent around the middle of the year.”

He said there are signs that the decline in job openings is starting to stabilize, albeit at a very low level.

“Employment intentions of surveyed companies for next year have become more positive and some of the most recent economic indicators suggest that the worst for the economy may be over. But all of these things will take some time to be reflected in companies’ recruiting and hiring decisions We have seen in past cycles that the labor market tends to lag behind broader economic trends.

“So I think for at least the first half of next year we’re going to see employment remain under downward pressure, wage growth continue to slow, and labor market conditions generally weaken a bit more.”

Miles Workman, senior economist at ANZ, agreed the labor market would lag behind the economic cycle. He expects a similar spike in unemployment, but said the rate should fall by the end of the year.

“For job seekers, the first half of 2025 promises to be difficult, but there is light at the end of the tunnel as the economy turns a corner.

“But it will not be a uniform recovery at the industry level. The pockets of the economy most sensitive to interest rates – private sector construction, non-food manufacturing, retail – are expected to experience fastest recovery as interest rates become less of a handbrake.”

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