Key Insights on NZ’s Employment Market February 2025 Edition

We’ve cleared the first-month hurdle of 2025, and New Zealand is gaining momentum. So, what’s been happening in our economy? Despite a tough last quarter, a key theme has emerged—rebuilding toward prosperity.
Home loan interest rates are set to drop, with half of all fixed-rate mortgages due for repricing in the next six months. The average one-year special rate has already fallen from 7.3% to below 5.8%, offering relief to many borrowers. However, those locked into longer-term rates may still face challenges. At the same time, house prices are projected to rise—8% in 2025 and 5% in 2026—creating a mixed financial landscape.
Lower interest rates should help revive consumer spending, but with ongoing financial pressures, many may choose to hold onto their savings. Still, positive trends suggest better days ahead. Economic growth is expected to reach 2.5% annually from mid-2025, with businesses gaining confidence as inflation eases and consumer activity picks up. However, for this recovery to fully take off, we need one crucial factor—more jobs!

The job market remains challenging, with many job seekers facing intense competition and a limited number of available roles. As a result, a growing number of people are considering opportunities abroad rather than staying in New Zealand. In the year ending November 2024, a record 127,800 people left the country, and immigration has significantly slowed, with a net migration gain of only 30,600—less than a quarter of the previous year’s surge.
It’s no surprise that many are looking elsewhere, especially with BNZ forecasting unemployment to peak at 5.5% by mid-2025. While hiring conditions may improve later in the year, the recovery won’t be immediate. Economic growth will likely be uneven, with industries like private construction, non-food manufacturing, and retail expected to recover first as interest rates ease.
It’s a tough situation, but there’s still hope. As economic pressures start to ease, we can expect greater work incentives and more job availability, which will ultimately help drive recovery in the job market.

In tough times, businesses need to be strategic to succeed. Instead of chasing all revenue opportunities, focusing on retaining profitable customers can make a significant difference. Increasing customer retention by just 5% can lead to a 25% profit boost. Collaboration with other businesses is also crucial—sharing costs or acquiring valuable assets from competitors can provide a competitive edge.
Investing in digital tools and AI can drive productivity, enhance efficiency, and open new sales channels, helping businesses stay agile in an increasingly tech-driven world.
As we move into 2025, finding the right talent will be key to staying competitive. The right employees can help drive your digital transformation, improve customer relations, and contribute to growth in a challenging market. Effective management is crucial during these periods. Setting clear goals, monitoring progress, and staying focused on long-term objectives will ensure your business remains resilient and primed for growth.
At Indus, we specialize in helping businesses find the right talent to fuel their strategic goals, drive innovation, and increase operational efficiency.