By Shamubeel Eaqub, Chief Economist - Simplicity Research Hub


Latest employment data shows signs of stabilisation, it’s good to see a floor forming in job losses. But it’s not all plain sailing: the share of Kiwis in work has returned to pre-pandemic levels.

The pandemic period was unusual - a combination of very strong hiring and slow population growth due to closed borders. This recession has brought us back to where we started before COVID-19. The cycle has hurt, but there’s also a structural story at play: a tightening labour market and a limited pool of available workers.

Job losses: Smaller than the GFC but uneven

There’s still softness in the data. Recent job gains have mostly been part-time, not full-time. That said, the overall pattern of job losses is far less negative than during the Global Financial Crisis (GFC)— the last big recession. At its worst, the GFC saw 59,000 job losses and took over five years to return to pre-recession employment levels. This time around, current job losses are 33,000 compared to the pre-recession peak.

Since December 2023, job losses have been:

• Uneven across age groups: down for most, but up for those aged 35–44 and 60+

• Concentrated among those with few or no qualifications, while highly qualified workers have fared better

• More limited in sectors like mining, wholesale, finance, real estate, and education

• Regionally varied - largely explained by the industry mix. With Otago (especially Queenstown tourism), Manawatū-Whanganui, Waikato, and Nelson-Tasman-Marlborough bucking the trend

What to watch for

The most convincing evidence of recovery will come when businesses start to advertise job vacancies. That hasn’t happened yet. Many firms held onto staff during the downturn, so it may take time. But once businesses begin to advertise again, that will be a concrete sign of a strengthening recovery.

Once businesses start to hire, growing employment and incomes will kick off a virtuous circle of more income, more spending and more investing.

For now, the labour market still favours employers. Job listings remain low, making it tough for those looking for work. But as the recovery takes hold, amid slowing net migration, the hunt for skills will be back on.

Chart 1 - Jobs lifted in 1Q25; this cycle shallower than GFC

Chart 2 - Not all plain sailing; share of Kiwis in work has fallen

Chart 3 - Uneven effect across age groups

Chart 4 - Those with few qualifications hit hard

Chart 5 - Handful of industries bucked the trend

Chart 6 - Some regions holding their own

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