Has the hot job market finally peaked? Fresh signs emerge

There are signs the red hot jobs market is easing in sectors like construction. Photo / Michael Craig

There are signs emerging that the hot job market may finally be starting to cool, says BNZ senior economist Craig Ebert in his analysis of the latest Seek Employment Report.

"With its seasonally adjusted fall of 3.9 per cent in September, the SEEK job ads series looks to be forming a peak," he said.

"In fact, the trend measure has slipped a bit over recent months, albeit still near a record high level, and one approximately 50 per cent north of the pre-pandemic marker of December 2019."

So, while the level remained "exceptionally strong" it seemed that some of the heat was coming out of the market.

"Not only was the trend in job ads starting to slip, from a peak, but the applications-per ad measure that SEEK puts together was more clearly turning up now, after hints of such in the August numbers," Ebert said.

Ebert noted that this was in line with an emerging trend in Tuesday's NZIER Quarterly Survey of Business Opinion (QSBO).

The QSBO showed business owners expressing slightly less difficulty in finding staff.

In that survey, a net 9 per cent of businesses reported capacity as their primary constraint, compared to 13 per cent in the previous quarter.

Capacity utilisation for builders and manufacturers also eased slightly in the September quarter, albeit still sitting at historically high levels.

"However, they also maintained a relatively upbeat outlook on hiring [intentions], which suggests that job advertising, while perhaps peaking, will probably not fall out of bed anytime soon," Ebert said.

The Reserve Bank - which lifted the official cash rate to 3.5 per cent yesterday - will be looking for signs of easing in the labour market as it seeks to reduce demand in the economy and get inflation back below 3 per cent.

Despite some promising signs it is widely expected to keep lifting the official cash rate into 2023 - to a peak of more than 4 per cent.

The SEEK data showed that in particular, the moderating trend has been playing out in many of the property-related categories, he said.

This became even clearer in September and was most obvious in Real Estate & Property and Design & Architecture.

"Construction itself has patently shifted down a cog from where it was earlier this
year," he said. "Perhaps related to all this, Banking & Financial Services was also losing momentum."

Sectors still showing signs of strong employment growth included Science & Technology.

"Hospitality & Tourism also retained a high level in trend terms, suggesting the recent burst of activity, after the Covid and border restraints were relaxed, hadn't run out of puff," he said.

More intriguing, given weak consumer sentiment, was the strength of the Retail & Consumer Products sector which was still riding close to a record high, he said.

ASX listed Seek is New Zealand's most visited job site. The Seek Jobs Report is based on its Seek New Job Ad Index, which measures only new job ads posted within the reported month to provide a clean measure of demand for labour across all classifications.