Unemployment in New Zealand is projected to rise, reaching levels reminiscent of the pandemic era.
According to recent forecasts, the unemployment rate is expected to increase from 4.8% in the last quarter of 2024 to 5.5% by mid-2025. However, it is also expected to improve after that.
Robert Walters’ Australia-New Zealand CEO, Shay Peters, told RNZ that New Zealand’s job market is on the brink of a serious change, as a record number of Kiwis are looking for employment opportunities in Australia. He is closely monitoring the escalating unemployment rate and its consequences.
“It’s a scary thought … I think there are a lot of talented New Zealanders who we are going to see on the open job market,” Peters said.
“We saw that recently in survey results we released. We surveyed mid- to senior-level professionals in New Zealand, and almost 42% of them are open to relocation this year, and mostly to Australia. The long-term ramifications of this are quite scary in terms of a talent vacuum.”
Peters also indicated that artificial intelligence is having a “profound impact” on the job economy. He expects to see decent growth in demand for professionals who work with technology, especially in the finance, IT, and engineering sectors.
“There are certain markets within technology that will continue to be buoyant, and we know the use of AI is only going to grow, and we need experts within that field to keep pushing AI in New Zealand.”
He is optimistic that the job market will begin to show gradual improvement in the latter half of the year. For Peters, although the current outlook may seem bleak today, employers will eventually need to resume hiring.
“We have gone through a significant period of cost management, and what that does for an organisation is they need to reprioritise. After this process, there will be labour gaps, and they will need special skills to come in and drive the organisation forward.”
“There will be a shuffling of the deck chairs for a period of time. And then new priorities will emerge.”
“Things will gradually improve. It’s not all doom and gloom.”