While the farming sector may be the one economic radiant spot at present, it isn’t stopping some provincial areas from suffering heavy job losses, new data shows.
Stats NZ’s business employment data for the June quarter, released on Tuesday, showed the number of filled jobs dropped 10,000 in three months, adn 50,000 fewer jobs than in December 2023.
Construction lost 2315 jobs in the quarter, or 1.3%. Accommodation and food services was down 1.2% or 1869 jobs, and administrative and support services was down 1.4% or 1337 jobs.
Since December 2023, there are 16,000 fewer filled jobs in construction, 8700 fewer in manufacturing and 6000 fewer in retail.
In the quarter, Auckland lost 4828 jobs, Wellington 1342, Hawke’s Bay 837 and Waikato 709.
Kaipara District lost 10.44% of its jobs compared to the same quarter a year earlier,Horowhenua 10.78% , Gore 9.5% and Upper Hutt 9.31%.
Hamilton gained 2%, Queenstown 4.59% and Porirua 4.56%.
Shamubeel Eaqub, chief economist at Simplicity, said the loss of jobs in smaller provincial centres was a surprise as other data indicated that rural economies were doing well on the back of strong commodity prices.
Ashburton, for example, had a strong dairy sector but also lost 6.7% of its filled jobs year-on-year.
Mike Jones, chief economist at BNZ, said strength in provincial areas might still be to come.
“I think that the broader sentiment within rural and agricultural-focused regions and sectors is still one of caution, where clearly there’s some good cash flows going into those parts of the economy, but they’re not necessarily being invested and spent just yet.
“So that may well be a thematic that starts to show up over the coming 12 months, with the labor market generally being that lagging indicator of what’s before in terms of activity in the economy.”
New zealand Economy Experienced Setback in June Quarter with 10,000 Job Losses
New Zealand’s economy faced a challenging June quarter, marked by a decline of 10,000 jobs and a slowdown in economic recovery, according to recent analysis. The downturn was largely driven by a contraction in the construction sector, which afterward impacted related manufacturing industries.
The decline in construction activity significantly affected industries supplying materials to the sector. Sales in non-metallic mineral product manufacturing – encompassing glass, bricks, and concrete – fell by 4.9%. Metal product manufacturing, which provides framing, reinforcing, and roofing materials, experienced a 5.1% decrease in sales. Wood and paper product manufacturing, including joinery and trusses, also saw a decline of 3.2%.
Beyond construction-related industries, job losses were also observed in accommodation and food services, and administrative and support services. This was attributed to businesses remaining cautious amidst challenging economic conditions and postponing investment and hiring decisions.The economic slowdown coincided with the announcement of tariffs at the beginning of the June quarter, which appeared to create uncertainty and put investment plans on hold. Though, early indicators for the current September quarter suggest a potential rebound.
While acknowledging the recent setback, the analyst indicated that the economy may have passed its lowest point. Momentum is expected to resume, although the recovery will likely be “a bit of a slow, hard slog.”
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