Labour market tightens further as job ads fall, applications per job surge

If artificial intelligence takes your job, the Government could pay you an income purely for being human - that’s the future this economist expects as tech companies talk up AI in this week’s earnings. Video / NZ Herald ...

The labour market tightened further in July as falling job ad volumes were compounded by double digit growth in applications per job.

National job ad volumes fell for the fourth consecutive month, down 4 per cent when compared with June, and have now fallen 26 per cent year-on-year, according to Seek NZ’s latest Employment Report.

“Job ad volumes are now almost on par with July 2019,” said Seek NZ country manager Rob Clark.

The latest figures show the Covid jobs boom, where job ad volumes were at their highest levels recorded, is firmly in the rear-view mirror.

There were notable increases in applications per job ad in manufacturing, transport & logistics. Photo / Getty Images

July’s fall in job ads follows declines of 3 per cent (June), 5 per cent (May) and 1 per cent (April) in the previous three months.

Meanwhile, applications per job ad rose by 11 per cent in July.

“Applications per job ad have been on the rise since April, and are now at their highest level on record,” Clark said.

“There were notable increases in applications per job ad in manufacturing, transport & logistics, community services & development and accounting roles.”

This was supported by figures from recruitment software platform JobAdder which show a surge in the number of job applications received per job.

New Zealand recruitment agencies saw an increase from 11.7 applications per job in the second quarter of last year to 12.3 in Q1 2023, and a whopping 22.3 in Q2 2023, according to JobAdder’s State of Market: ANZ Talent Acquisition Report.

Meanwhile, the number of jobs created per account fell from 58.6 in Q2 2022 to 54.3 in Q2 2023.

“After grappling with candidate shortages due to unprecedented job growth, the tables are turning,” JobAdder chief executive Martin Herbst said.

“While job creation has experienced a minor decline from the large influxes we saw in 2022, job applications have surged. This implies talent acquisition is transitioning from a candidate-centric market to a market ripe with potential for recruiters,” Herbst said.

Stats NZ’s labour market data earlier this month showed the job market had turned, even if it remains at “intensely inflationary levels”.

The official unemployment figure for the June quarter rose from 3.4 per cent to 3.6 per cent, still near historic lows.

Economists expect the labour market to continue gradually cooling.

Meanwhile, the underutilisation rate - a broader measure of spare labour market capacity than unemployment alone - increased from 9.1 per cent (revised) to 9.8 per cent in the quarter.

The largest contribution came from part-time workers that were available to work more hours than they were offered.

The Reserve Bank, in a May Monetary Policy Statement, has forecast the unemployment rate to peak at 5.4 per cent.

The Bank has effectively engineered a recession or slowdown by raising the official cash rate, with a goal of unemployment ultimately rising.

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