A leading economist is predicting the balance of power in the labour market to shift to employers.
New information from the job-search website Seek on Monday showed job ads are down 11 percent compared to the same time last year and the number of people applying for each job has grown by four percent compared to the previous month.
Businesses have been battling since COVID-19 to hire staff, which is highlighted by New Zealand's low unemployment rate of 3.4 percent.
Westpac chief economist Kelly Eckhold told Newshub Late on Monday there are signs that it's starting to become easier for businesses to recruit.
"The Reserve Bank is over 18 months into increasing interest rates with the objective of slowing the economy and we've had a few other indications of the labour market that definitely look like employers are finding skilled labour easier to find relative to other factors that might have been constraining their businesses six months ago," Eckhold told Newshub Late host Janika ter Ellen.
The labour market report for the March quarter is released next week with Eckhold saying this will be key to understanding where the New Zealand economy is.
"We will get an up-to-date read on what's going on with job growth and the unemployment rate," he said.
"The unemployment rate in particular is pretty important to us because it's a pretty reliable indicator of the underlying strength of the economy, I suppose, particularly given that some of the other indicators have been harder to read given the effects of COVID on a lot of the statistics in the last few years."
Eckhold believes the balance of power will shift towards businesses and away from workers when it comes to negotiating.
Westpac is predicting the unemployment rate to increase to closer to 4 percent by the end of the year and to 5-5.5 percent next year.
But Eckhold is urging workers not to panic as he's not expecting the unemployment rate to skyrocket.
"When you go into this stage of the job cycle, job security becomes a higher priority relative to perhaps hunting out that next great opportunity," Eckhold told Newshub Late.
"But there's no cause for panic. I mean, the unemployment rate is still at very low levels and is only predicted to drift out relatively slowly. So there is sort of time to sort of see what evolves."
Watch the full interview with Kelly Eckhold in the video above.
