Employment indicators

Services industries leading continued jobs growth

28 Apr 2023

Sabrina Swerdloff

Our take on the latest Employment indicators (Fri 28 Apr 2023)

Filled jobs up 0.4% in March (seasonally adjusted)

Annual jobs growth among 20-24-year-olds turns positive

Accommodation and food services jobs up 13%pa

The key numbers...

Filled jobs rose 0.4% in March from February (seasonally adjusted), a continued solid pace of jobs growth.
The service industries are continuing to lead jobs growth, with filled jobs up 4.3%pa in March. This result is the strongest annual growth in the services industries in 18 years, with tourism-related employment a key driver of this growth. There are now 18,100 more filled jobs in the accommodation and food services industry than in March 2022.
Annual jobs growth was positive across the board, apart from the primary sector, which entered its sixth month of consecutive annual declines greater than 2%pa. Construction jobs growth rose to 2.6%pa from 2.0%pa last month, and administrative and support services jobs growth accelerated to 6.5%pa.
There was a slight let-up in the “brain-drain” of people in their twenties as rapidly rising net migration bolsters the labour market. Jobs growth among 20-24-year-olds lifted to 0.9%pa in March after four consecutive months of declines and falling employment among 25-29-year-olds retreated to just -0.2%pa, the smallest decline in more than a year.
It appears that the employment slowdown in Cyclone Gabrielle affected areas observed in February was temporary. Filled jobs in Gisborne rose 1.4%pa, a strong follow up to the 0.9%pa fall last month. Employment growth in Hawke’s Bay accelerated to 2.2%pa after four months of growth around the 1%pa mark.
Earnings per filled job increased 5.8%pa over the year to March 2023, remaining elevated compared to pre-pandemic growth, but now below the annual inflation rate of 6.7%pa.

Jobs growth sustained in March

Filled jobs, monthly % change, seasonally adjusted

...and our reaction

Jobs growth marched forward again in March, with a 2.3% rise in employment on average over the last twelve months compared to the previous year. Soaring net migration in the last few months, with an estimated 153,300 arrivals in the year to February 2023, is likely helping to sustain growth in employment levels even as job ad numbers pull back.
Strong growth in tourism-related industries comes at a time when increased demand in the economy is keeping inflation high. Recent analysis by Treasury staff indicates that demand-side inflationary pressures increased over 2022 as pandemic restrictions eased, in part due to the return of tourists and a move back towards more household spending on services.
The 4.3%pa increase in service industries employment in March is strong, and suggests that demand-side factors of inflation may be particularly stubborn as tourism rebounds with resources in the economic still scarce relative to demand.
Growth was also sustained across other parts of the economy, with an additional 5,400 jobs in manufacturing as compared to March 2022, and an additional 5,700 professional services jobs. Although we wouldn’t yet expect for jobs growth to turn around, given that household spending indicators are only just beginning to moderate, sustained growth across such a diversity of industries highlights the widespread nature of pressure across the economy.

Latest updates

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Employment indicators

Services industries leading continued jobs growth

The key numbers...

Jobs growth sustained in March

...and our reaction

Latest updates

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