Unemployment Decrease Is Good News, But Pressures Building Beneath The Surface

The Employers and Manufacturers Association (EMA) says today’s slight decrease in unemployment is good news for the economy, but numerous pressures remain.

Statistics NZ reported that unemployment for the March 2026 quarter dropped slightly to 5.3%, from 5.4% in the December quarter.

EMA Head of Advocacy Alan McDonald says while it is encouraging to see unemployment drop, businesses are under growing pressure.

"We are hearing firms are looking at delaying investment decisions, parking up equipment, and possibly delaying the start of projects as they await greater certainty."

McDonald says geopolitical instability and rising fuel costs are adding to the strain on employers, and the longer these pressures persist the harder it becomes.

Young jobseekers are being hit particularly hard, with youth unemployment remaining elevated in several regions.

"The number of 18 to 24-year-olds unable to find work is deeply worrying," McDonald says.

"In some regions, those figures are well into double digits."

This is compounded by weakness in sectors that traditionally provide entry-level opportunities.

"Construction, manufacturing and distribution are all doing it tough," McDonald says.

"These are exactly the industries that tend to absorb young and lower-skilled workers when the economy is growing."

McDonald says previous confidence surveys showed businesses were expecting to hire, but the Iran conflict may blunt that confidence.

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