Source: Employers and Manufacturers Association (EMA)
The EMA (Employers and Manufacturers Association) says today’s increase in unemployment reflects the cautious approach many businesses have adopted as they navigate a challenging and uncertain economic environment.
Stats NZ today reported unemployment rose to 5.6% in the June 2026 quarter, up from 5.3% in the March quarter.
EMA Head of Advocacy Alan McDonald says the result highlights the pressure many businesses, particularly small and medium-sized enterprises, have faced over recent months.
McDonald says today’s result is not unexpected, with Treasury forecasts a year ago suggesting unemployment could reach this level by this point in the year, but that does not make the result good news and it should be seen in context.
“Many businesses have been focused on retaining the staff they already have rather than taking on new employees.
“For some firms, higher costs, weaker demand and global uncertainty have meant delaying investment decisions and being much more cautious about growth.”
McDonald says the June quarter coincided with significant international uncertainty, including the conflict in the Middle East and sharp movements in global oil prices.
“Fuel, transport and input costs matter enormously to New Zealand businesses. The volatility we saw during the quarter affected confidence, investment decisions and hiring intentions.”
McDonald says it is important to remember that unemployment is a lagging indicator.
“These figures reflect what businesses were experiencing during April, May and June. More recent business confidence measures and PMI data have shown some more encouraging signs, suggesting many firms are still looking for opportunities to grow when conditions improve.”
McDonald says the significant increase in the number of young people not in employment, education or training reflects the reluctance of many businesses to take on new staff.
“The rise in the NEET rate (Not in Education, Employment, or Training) is further evidence that employers are concentrating on holding onto the people they have rather than expanding their workforce.
“When recruitment slows, young people are often the first to miss out because entry-level jobs become less available.”
McDonald says restoring business confidence remains critical to improving labour market conditions.
“Businesses want to invest, grow and create jobs. If uncertainty eases and confidence continues to improve, we would expect hiring intentions to strengthen over the coming months.”