(April 28): New Zealand’s economy continued to add jobs in March even as the Iran war hurt business confidence and hiring intentions.
Filled jobs rose 0.3% from February to 2.35 million and were the highest in 14 months, Statistics New Zealand said Tuesday in Wellington. The number of jobs has increased by 14,600 from a recent low in July, but remains nearly 39,000 lower than two years ago.
Prior to the US and Israeli invasion of Iran, low interest rates had boosted business and consumer optimism helping the labour market stabilise and encouraging firms to hire. Economists expect that the economy posted modest growth in the first quarter, even as fuel costs surged in March.
“There does appear to have been a modest uptrend emerging over the last six months,” said Michael Gordon, senior economist at Westpac in Auckland. “Any impact on hiring from the Iran conflict is likely to show up with a delay, as the labour market tends to lag the broader economic cycle.”
The mood has changed as the geopolitical stalemate continues and investors expect that the central bank will raise interest rates as early as July. Business sentiment slumped to its lowest since mid-2024 in the first quarter as the conflict drove up the fuel and other costs, hurting profitability with a majority of firms saying they had fired workers in the period and expected to reduce headcount further in the three months through June.
See also: Japan’s inflation picks up as oil clouds outlook ahead of BOJ
Local economists expect a report next week to show the first-quarter jobless rate matching or higher than the 5.4% in the fourth quarter, and forecast the gauge to stay high through 2026.
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