Low business confidence takes its toll on the job market
Low business confidence is taking a toll on the job market as new listings fall to the lowest in four years, according to an analysis of over 66,000 vacancies listed on Trade Me Jobs for the quarter ending 31 December 2019.
Trade Me’s Jeremy Wade said after years of solid listing growth, 2019 was a tough year for the job market and in the final quarter we saw the impact of low business confidence.
“New Zealand’s job market ended 2019 on a sour note with new job listings experiencing the biggest percentage drop in years, falling 10.6 per cent year-on-year with 24 of the 26 sectors on Trade Me Jobs experiencing a dip in job vacancies.
“What’s most concerning is the effect business confidence is having on the construction & roading sector with job vacancies falling a massive 22 per cent on last year.”
Mr Wade said this is particularly worrying as the construction sector is critical to all of us. “Quality infrastructure means we can drive from A to B safely and have the facilities we expect to use going about our lives. However, with a lot of big infrastructure projects coming to an end, and no certainty about when the next ones will begin, we’re at risk of losing talent to offshore employers.
“While the Government announced a big infrastructure package late last year - specifics are needed quickly in order to settle the nerves we’re seeing in that sector. The general election being on the horizon is another complicating factor, spending and decisions can become delayed while the election result is determined.”
Mr Wade said the only two sectors to buck the trend were government & council and executive & general management. “Government & council was the most upbeat with listings rising almost 16 per cent on the same time last year. Executive & general management was the only other sector to see an annual increase in job vacancies, climbing 4 per cent.”
Some good news for employers
Mr Wade said there is a silver lining for those employers who are in the mood to hire.
“With less jobs on offer, the number of applications per listing rose a solid 18 per cent on the year prior meaning employers who are hiring will have more prospective employees to choose from.
“Applications for roles in engineering, construction & roading, and fishing & forestry saw the largest increases, climbing 45 per cent, 39 per cent and 33 per cent respectively,” said Mr Wade.
Regions a mixed bag
Taking a closer look at the country, Auckland businesses seemed the most hesitant to hire at the end of last year with job listings in the region down 16.5 per cent year-on-year. “Behind Auckland, Canterbury saw the biggest drop in job vacancies falling 14.2 per cent on last year.
“In the third quarter of the year we saw Wellington buck the business blues and come out surprisingly strong with an increase in job listings. However, in the final quarter of the year, business uncertainty rippled through the region and we saw job vacancies fall 4.8 per cent on the year prior.”
Mr Wade said Gisborne, Nelson/Tasman and Hawke’s Bay were the only regions to see an increase in listings when compared to last year, rising 5.8 per cent, 1.2 per cent and 0.4 per cent respectively.
Wellington maintains hold over Auckland in wage stakes
Mr Wade said 2019 saw our two largest cities tied in a ‘wage war’, however, Wellington City continues to have a firm grip on the highest average wage. “Employers in the capital are willing to pay more than their Auckland counterparts with the average pay in Wellington City at $72,649 compared to Auckland City at $71,465.
“Roles in IT continue to dominate the highest paying jobs advertised on Trade Me Jobs with IT project managers earning the most at $142,868.”
Mr Wade said the national average wage rose a modest 0.8 per cent on last year to $61,575.
Outlook for 2020: Election likely to cool job market
“Typically from January through to February, we see a flurry of activity in the job market as employers come back to work ready to look for new talent and some employees kick off the New Year by seeing what jobs are on offer. This busy period should see the market bounce back a little as more jobs are on offer.”
“If we look further ahead to the rest of the year, with a general election around the corner, it’s likely that election jitters will cool the job market towards the end of 2020. We saw this happen during the 2014 and 2017 election campaigns as apprehension about who will be leading the country caused employers to hold off hiring until they knew which way the political winds are blowing.”
Mr Wade said changes to the minimum wage will also have an impact on the job market in 2020. “The Government’s announcement in December that the minimum wage will rise from $17.70 to $18.90 an hour in April will lift the average wage and come as welcome news for many employees.
“While the last couple of minimum wage increases have not significantly impacted the propensity to hire, this year may be different as employers contend with rising costs and low business confidence.”