By Shamubeel Eaqub, Chief Economist - Simplicity Research Hub


New Zealand's recession has so far claimed 27,000 jobs over the past 12 months. Althought this doesn't tell the full story; total job hours have actually shrunk further. If you factor in how many part-time jobs have replaced full-time equivalents (FTE), it actually equates to a total FTE work reduction of 74,000 jobs. And that starts to sound more grim.




Rural vs. city vibes

Having been travelling the country over the last week, there's been a clear mood shift across particular regions - Wellington and Auckland being low lights when it comes to sentiment. On the other hand rural New Zealand really stands out for its high levels of confidence right now - a stark contrast.

Looking at the numbers across generations

Alpha-cession: Half of all job losses have been sustained by those aged under 20 years old (16,000 out of the total 27,000 jobs lost)

He-cession: Male job losses have outpaced female job losses by a factor of two (men have seen 18,000 jobs lost vs 9,000 less for women). This has been due to male-dominated industries being harder hit, for example the construction industry which is hurting badly.

Security-cession: While total jobs are down by 27,000, full-time equivalent (FTE) employment is down 74,000. Total working hours have fallen sharply, and the mix of jobs has changed: While there are 33,000 fewer full-time jobs, there are now 5,000 more part time jobs.

Hustle-cession. The number of people working side hustles has fallen by 13,000. Potentially a head-scratcher, when the cost of living challenge is so dire! You could assume that a lot of people are looking to hustle more, if take-home pay no longer meets the requirements of every-day costs.


Why there are so many less jobs

Being in a recession means that we as a nation of consumers are spending less. Lower consumer activity translates into less work required to fulfill that lower demand, and this of course shows up in less jobs available.

When you look at the total people employed as a percentage of the population, the share of the population in work and the unemployment rate now at 5.2% has wound the clock back the clock nearly a decade - to what we saw in 2016. However, total work hours have fallen more that total jobs. From a social perspective, it's better that hours have reduced more than the total number of jobs. Because history shows that long periods out-of-work causes what we call ‘scarring', making it harder for a person to get back into the workforce.

What we're seeing now, funnily enough, is still not as bad as the GFC, when the unemployment rate was closer to 7% than 5%. Businesses in New Zealand are hanging on to people, because we've learnt that good people are hard to find. But the question is, how long can businesses "hang on" to more people if their profits remain under pressure?


Recessions have winners and losers

Some industries are still growing. This includes the likes of education, utilities (gas, water and electric), finance and funnily enough, the real estate industry. And even industries that aren’t growing seem to still be hiring - around 130,000 people started new jobs in the last three months. This suggests a healthy amount of job switching across various 

But there are very few vacancies, with job ads having been falling sharply since late 2022. So, there is intense competition in the market for less vacancies. Just look at r/new zealand on Reddit and you can see the dire state of those applying for 100's of jobs, with little response.


Looking ahead 

Of course, as has happened across history, every economic cycle turns. So far in 2025, an uptick in reported optimism hasn't actually translated into more job ads. This uptick, once it comes, will be the key indicator of recovery.


What can you do?

If you're having no luck in finding a job and you've been on the hunt for some time already, there are alternative options to consider:

Go south? The job industry is looking pretty good in Otago and Southland. This is thanks to the south's strong tourism and agriculture (especially dairy) industries.

Go West? 30,000 (net) Kiwis moved across the ditch to Australia in 2024, because thing are, simply put, better there. Over the last year, Australia saw a growth of 300,000 jobs compared to our 33,000 FTE reduction.

Go study? Now could be a great time to build up your skills – that could be at a tertiary level via university courses, but you can also search out more accessible opportunities via apprenticeships, vocational education, and even entry-level support through the Ministry of Social Development (MSD) courses. Qualifications aren’t everything, but they can help. Technical skills and credential can help you get a foot in the door, or to stand out from others. This already seems to be what many young people are doing, given the number of people in study has spiked over the past 12 months (a 17,000 increase).

Ask? Personal recommendations remain the best  way to find jobs - as the saying goes, it's not what you know, but who you know.

The recession that New Zealand is continuing to experience has hidden depths. Even if you're not currently part of the collateral damage, take care of others who are looking for work - and think about recommending them and sharing your networks, if you can help.

This is Simplicity Research Hub’s independent expert commentary and thought leadership on economic trends and policies of interest to all New Zealanders. This content is our opinions and is provided for general information only. It does not relate to your particular financial situation or goals and is not financial advice or recommendations. Any external resources provided are accessed at your own risk and the Simplicity Research Hub takes no responsibility for third party content and does not approve, recommend, or endorse any external websites or the content they contain.