Economic sentiment

Welcome to 2026… and to a hiring market that is looking the most promising in a few years.

However, economic conditions in New Zealand remain mixed. National unemployment increased slightly to 5.3% in the September 2025 quarter, while Auckland continues to lag behind at 6.1%, with around 63,800 unemployed and total employment easing to approximately 980,100. In contrast, several regional centres are showing stronger growth, reinforcing the ongoing divergence between Auckland and the rest of the country.

Monetary policy has become more supportive, with the Official Cash Rate cut to 2.25% on 26 November 2025. The Reserve Bank of New Zealand has indicated that lower interest rates are helping to support economic activity, while acknowledging that the labour market remains weak, albeit stabilising. Inflation is currently sitting at the upper end of the target range, but is expected to ease over time, providing further scope for economic recovery.

Business confidence has improved materially from prior lows. The latest NZIER Quarterly Survey of Business Opinion shows confidence in Q4 2025 at its highest level since 2014, with a net 48% of firms expecting better economic conditions ahead. Notably, the survey also highlights the emergence of labour shortages in specific areas, suggesting early signs of tightening despite broader labour market softness.

This improvement in sentiment is occurring in an election year, with the government maintaining a strong focus on disciplined spending and demonstrable return on investment. This has begun to influence how government procures services, with a shift toward more flexible contracting models. There is an increasing emphasis on fractional resourcing and discrete, outcome-focused pieces of work rather than large, long-term engagements.

Overall, confidence is beginning to lift, but from a very low base. Hiring activity remains highly selective, with organisations cautious in their approach and decision-making cycles continuing to be extended. At the same time, sustained migration of skilled New Zealanders to Australia has reduced depth in already shallow technical talent pools. Should market conditions improve rapidly, these constraints are likely to be exposed.

Technology and IT market

In extremely positive news, SEEK recorded a 23% increase in job postings across New Zealand in the first week of the year compared to the same period last year, with particularly strong activity reported anecdotally in the technology sector.

The technology and IT labour market continues to be uneven. While recent data indicates Auckland is no longer in recession, momentum remains fragile. Hiring is increasingly focused on essential roles, with limited appetite for discretionary or “nice-to-have” positions.

Investment remains steadier in areas directly linked to risk mitigation and productivity improvement, including platform engineering, data and analytics, cyber security, architecture, and delivery roles. Organisations are prioritising capability that enables efficiency, resilience, and scalability, reflecting both ongoing economic caution and longer-term digital transformation objectives.

This focus is being reinforced by the government’s agenda in an election year, following Prime Minister Luxon’s State of the Nation address in early January. The government’s emphasis on economic diversification and national security is creating clearer signals around where investment (and therefore technology hiring), is most likely to concentrate.

Demand is strongest in areas that reduce risk or directly support growth. Cybersecurity and resilience have firmly moved onto the board's agenda, sustaining demand across security engineering, cloud security, identity and access management, incident response, and governance, risk and compliance. Defence-adjacent technology is also emerging as a key growth area, with increased opportunity across secure systems, data and AI, and programme delivery as defence organisations deepen engagement with industry.

Export-led growth and infrastructure investment provide additional support, particularly in Auckland. Organisations are investing in digital capability that enables scale into new markets, including ERP uplift, data integration, digital commerce, and customer analytics, while faster consenting and infrastructure activity would lift demand for digital engineering, data platforms, asset management, and delivery capability. Overall, hiring is expected to remain targeted and ROI-driven, rather than broad-based, with Auckland likely to amplify these trends as confidence improves.