Hiring activity continues to slow as recession starts to bite

Tourism hotspots such as Queenstown have taken a hit and job ads in the hospitality and tourism sector are down. Photo / Destination Queenstown

Hiring activity continued to slow last month with job ad volumes falling 3 per cent when compared to May, Seek NZ said today.

The employment marketplace’s Employment Report for June showed job ad volumes fell for the third consecutive month, following a 5 per cent decline in May and a 1 per cent drop in April.

Job ad volumes were down 21 per cent year-on-year - albeit coming off from a period when job ads were at their highest on record during the Covid jobs boom.

“With the economy now officially in a recession, cost consciousness would be front of mind for most organisations, particularly as we head into a new financial year, so it is unsurprising that hiring activity is slowing,” Seek NZ country manager Rob Clark said.

Applications per job ad rose 10 per cent in June when compared with the prior month, down from a 13 per cent rise from April to May, but still showing signs of a competitive market.

“Candidates remain active on site, and applications per job ad have picked up in response to falling job ad volumes,” Clark said.

“Changing jobs remains the quickest way to attain a pay rise, which is likely driving many applications, though news of a recession may lead to hesitation among some candidates.”

Clark said the declining trend in job ad volumes wasn’t evident across the board, however.

An increase in demand saw job ad volumes rise in trades and services (up 0.4 per cent), construction (up 3 per cent) and engineering (up 1 per cent).

Most industries recorded a decline in job ads in June, notably retail and consumer products (down 13 per cent), healthcare and medical (down 10 per cent) and hospitality and tourism (down 13 per cent).

Job ad volumes in the hospitality and tourism sector have fallen 40 per cent since March.

Northland was the only region to record an increase in monthly job ads (up 3 per cent).

Auckland’s 4 per cent drop in job ads led the overall national decline, followed by Wellington (down 3 per cent).

Last month it was confirmed that New Zealand entered a recession in the March quarter after the economy contracted for the second consecutive quarter.

And last week data from Trade Me Jobs showed job listings fell 15.2 per cent in the second quarter of the year when compared with the first quarter.

The national average salary, meanwhile, reached a record high in the second quarter amid growing competition to attract employers, hitting $70,069, 6.1 per cent higher than the same period in the prior year.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports.