Economist expects unemployment rate to increase to five percent by end of the year

  • 18/03/2024

A leading economist is predicting New Zealand's unemployment rate could reach five percent this year as companies announce large job cuts.

New Zealand's unemployment rate is currently at four percent with Infometrics principal economist Brad Olsen predicting it could rise a percentage point by the end of the year.

There have recently been several high-profile job loss announcements, with around 300 jobs proposed to be cut at Newshub, 68 at TVNZ, at least 22 at Spark, and some at Les Mills all announced in recent weeks. The proposed job losses come on top of around 600 losses at universities last year and expected job losses across the public sector.

"As we go through the year, we are expecting some of those announced job losses will turn into actual recorded job losses," Olsen told AM co-host Melissa Chan-Green.

He said this will result in more people looking for jobs in an already saturated market.

Olsen said so far, the increase in unemployment has been driven more by jobs growth not matching population growth, rather than actual losses of jobs.

Annual net migration to New Zealand hit a record 133,800 in the past year, while the number of job advertisements is well below pre-pandemic levels.

With more people looking for work and less jobs available, Olsen said we could see people looking to head overseas.

"You could well see some talent head overseas trying to find another opportunity in some other part of the world."

Watch the video above.