Jul 25
Mid-Year Reset: Where New Zealand’s Workforce Really Stands
Key Insights on NZ’s Employment Market July 2025 Edition
As 2025 crosses its halfway mark, the employment landscape in Aotearoa is revealing a layered and shifting reality. From the lingering impacts of Covid-19 to a cost-of-living crunch and growing worker dissatisfaction, the second half of the year is set to test both resilience and resolve. In this edition, we unpack the sectors under pressure, the real toll of workplace harm, and the widening cracks in job quality that headlines don’t always show.
Kicking off the second half, what's changing?
Take manufacturing, for example. While the BNZ–BusinessNZ Performance of Manufacturing Index (PMI) lifted slightly from 47.4 in May to 48.8 in June, it still remains below the neutral mark of 50. That’s a continued signal of contraction. Conditions remain tough, and it’s not surprising. With household spending staying low, many producers are scaling back inventory and cutting raw material orders due to the uncertainty ahead.
The underlying message applies beyond just manufacturing:
Tough economy + high cost of living = fewer reasons to buy or sell.
As BusinessNZ Director Catherine Beard put it, “The positive start to the year was being undone, and familiar issues remained the key challenges to the sector.”
And it’s not just manufacturers feeling the weight. In hospitality, Auckland café KIND has closed its doors. It’s a casualty of the same slow, post-Covid consumer retreat. Owner Nigel Cottle says the shift is clear: customers, still cautious and cash-strapped, no longer order full meals. “Just a coffee… and maybe a muffin, if we’re lucky.”
Which brings us to the bigger story behind these shifts: Covid-19’s lasting impact.
Although the health crisis has passed, the economic and social consequences continue to shape daily decisions. From household spending to business survival, the pandemic didn’t just disrupt. It left cracks in the system we’re still navigating.
The Covid Problem
The impact of the Covid-19 pandemic on New Zealand has been described by many business leaders as a snowball that hasn’t stopped growing. While the health response may have ended, its ripple effects are still being felt. Now, serious questions are being raised about the ethics and consequences of mandates and lockdowns.
At the Royal Commission of Inquiry into the government’s pandemic response, business leaders have spoken out about the legal challenges, financial damage, and lack of representation they experienced during the crisis. Much of the focus has been on the extended 2021 lockdown following the Delta outbreak. Auckland spent 17 weeks under strict restrictions. During that time, central city businesses saw sales drop by as much as 95 percent, and similar impacts were felt across the country.
Vaccine mandates also created legal grey areas, particularly when employment rights clashed with public health orders. Employers were often left with no choice but to let staff go if they refused vaccination, even when no clear guidance existed on how to manage it fairly.
The frustration among business owners has largely stemmed from one core issue: they weren’t given a voice. Many said they were left out of decision-making entirely, often only being informed of major changes at the last minute.
As the Inquiry continues, business leaders are now pushing for real change. Their message is clear. Next time, they want to be involved from the beginning. From hospitality to logistics and events, industries are calling for better consultation, more flexible legal protections, and stronger partnerships between government and business.
Leaders like Viv Beck (Heart of the City) and Paul Jarvie (EMA) have urged for clearer frameworks around mandates and a more inclusive, trust-based approach going forward. Others, like Northland’s Chamber of Commerce, have pointed to community-led strategies as more effective than heavy-handed mandates.
This isn’t just about looking back. It’s about ensuring that when the next national crisis hits, the public and private sectors work together with transparency, fairness, and resilience at the core.
Burnout and Underemployment Are Reshaping the NZ Job Market
While businesses continue to call for a stronger voice in national decision-making, the workforce itself is showing signs of deep strain.
A recent survey from the Public Service Commission revealed that 42 percent of public servants are experiencing excessive job-related stress, and fewer than half feel able to keep up with their workloads. Even in traditionally stable government roles, job satisfaction has dropped to 68 percent, down from 75 percent in 2020. Trust in senior leadership has also declined, now sitting at just 58 percent. It’s a signal that fatigue and frustration are running deep across the public sector.
At the same time, a different challenge is growing louder: underemployment. Although the official unemployment rate has held steady at 5.1 percent, more than 100,000 New Zealanders are now underemployed. These are people working part-time while actively seeking more hours. That’s one in nine part-time workers nationwide.
In key sectors like retail, hospitality, and care, 34 percent of part-time staff report wanting more work. This reflects a widespread mismatch between available hours and actual need.
Together, these figures reveal a workforce stretched thin. Not just by economics, but by uncertainty, stress, and instability. For many workers, it’s not just about finding a job. It’s about finding one that offers enough hours, enough support, and enough reason to stay.
