Regional Divide: Why New Zealand’s job growth is shifting south

New Zealand’s labour market is shifting in ways that challenge long-held assumptions about where opportunity sits and how quickly confidence returns. While national headline numbers point to rising unemployment and signs of strain, a closer look reveals a far more uneven pattern of activity. Pockets of growth are appearing in unexpected regions, hiring momentum is strengthening in certain industries, and job seekers are navigating a market where competition remains high despite improving quarterly indicators.

This uneven pace of recovery is especially visible when comparing major cities with regional areas. Auckland and Wellington continue to experience subdued hiring sentiment, while parts of the South Island are seeing renewed confidence and stronger demand. Employers in high-activity regions are beginning to compete for skilled workers, even as other areas experience an oversupply. The geography of opportunity is shifting, and both businesses and job seekers are reassessing how to position themselves in this changing environment.

At the same time, job seekers are encountering a landscape that feels tougher than expected. Applications are rising, listed roles remain well below 2022 levels, and the gap between available opportunities and active candidates shows no signs of narrowing quickly. In this environment, timing, preparation, and regional awareness are increasingly influencing outcomes for both employers and job seekers.

“Opportunities are emerging across the country, but the recovery is far from even.”

On a recent NZ Market Update, Host Shannon Barlow, NZ Managing Director, was joined by Guest Nicole Williams, Head of Jobs at Trade Me, to examine the latest quarterly data and what it signals for employers, job seekers, and regional workforce trends.

Nicole noted early in the discussion that the latest Trade Me data “really mirrors the conversations we’re having on the ground,” highlighting the thirteen per cent rise in job listings nationwide. She described the South Island as being filled with “enthusiasm, optimism… a sense that new projects across construction and infrastructure are getting going.” This perspective places the regional uplift at the centre of the market’s momentum, with population growth, tourism activity, and major project starts helping to fuel stronger hiring appetite across areas like Queenstown and Christchurch.

Shannon contrasted this with what she referred to as a “nation of farmers… waiting for the grass to grow,” a reflection of the slower conditions across Auckland and Wellington. This metaphor captured the sentiment among urban employers who remain hesitant to commit to new hiring until clearer economic signals emerge. The difference in confidence between regions is creating a split market: one half experiencing demand for skills, the other grappling with higher applications and longer decision-making timelines.

Nicole went on to explain that this divergence extends into industry performance, saying there is “consistency in the industries… across building and construction, across infrastructure, tourism and retail,” while the real variability lies at the regional level. She also highlighted challenges emerging in office-based roles, particularly entry-level positions, describing it as “a bit of a perfect storm… with AI and entry-level roles.” This shift reflects wider changes in how organisations use technology and where early-career pathways are tightening.

A central theme throughout the update was the mismatch between rising applications and limited job availability. Nicole emphasised that “job listings available are about half what they were back in 2022,” a reminder that the recovery remains partial. She added that “it is still an incredibly tough market for job hunters,” reinforcing the reality that competition for roles continues to increase even as quarterly numbers improve.

Shannon introduced the comparison with Australia, noting the perception that “the grass is greener over there,” only for Nicole to clarify that Australian employers are already saying “it’s hard to find people.” Her observation that Australia is “just that little bit ahead of us in their recovery” suggests that tightening conditions may not be far off for New Zealand. This context strengthens the case for employers to act sooner rather than later when they identify strong talent.

Nicole also drew attention to the growing regional mismatch, explaining that “there’s that unevenness around where those opportunities are starting to spring up versus where people are actually living and working today.” This lack of mobility means regions experiencing rapid growth, such as the South Island, are finding it difficult to secure skilled tradespeople for new projects, while urban employers face an oversupply in certain white-collar categories. The geographical imbalance is shaping recruitment pressures across the country.

Finally, Nicole offered a clear call to action for employers, stating, “If you’re on the fence about whether you should hire someone now, this is a great time to be hiring.” She emphasised that “maybe in six or twelve months’ time, you won’t have quite that same availability,” reinforcing the importance of timing as conditions shift. With the market poised for potential tightening, businesses that move now are better placed to secure the talent they need before competition intensifies.

What actions should employers take to stay ahead in NZ's shifting labour market?

• Assess whether hiring plans should be brought forward while strong candidate availability remains.
• Review regional workforce needs and plan for areas where demand is rising faster than the talent pool.
• Strengthen pathways for early-career candidates as AI and digital tools reshape traditional entry-level roles.
• Prepare for rapid shifts in market conditions, particularly in major cities where confidence may return quickly once large projects commence.