Backbone of the Economy Is Hiring, but Pay Packets Lag

Auckland, New Zealand, September 17, 2026 — While economic growth remains fragile, new employment data highlights Canterbury as a solid performer with a healthy 2.4% uplift in employment growth during August compared to the previous month.

This is almost two percentage points above the national average of 0.7%, according to the latest Employment Hero Jobs Report.

While Auckland and Wellington continue to trail other regions, Canterbury’s sustained growth is highlighted by the region’s 6.3% increase in headcount versus three months ago. In comparison, Auckland saw a more modest increase of 1.8% over the quarter.

Overall, the South Island saw a 0.5% increase in headcount month-on-month and 2.7% compared to three months ago. Casual employment helped drive growth in the South, with an 8.4% increase over the last three months.

Elsewhere, Nelson was a wages bright spot, with sustained growth across the quarter of 5.5% and the area sitting fourth among all regions nationally for hourly rate.

While unemployment remains high (Stats NZ), headcount growth among some SMEs has remained positive since February, with small monthly gains recorded.

The Employment Hero Jobs Report draws on more than 3,300 businesses and 73,000 employees. The data is a strong indicator of how the SME sector is performing and provides a real-time view of the employment and wage environment.

Wages still struggling overall

The increase in headcount is not being matched by stronger wage growth, with national wages flat month-on-month and up only 0.2% over the past three months. Year-on-year wage growth continues to decelerate sharply, with hourly rates rising just 0.3% in August vs. 4.7% in August 2025, a near-standstill in pay.

Employment Hero New Zealand General Manager Neil Webster says the data shows a strengthening employment picture, particularly in parts of the South Island, although the broader recovery remains uneven.

“Canterbury is showing strong employment growth in the country, which is an encouraging sign for businesses and workers in this region,” Webster says.

“At the same time, wage growth remains very subdued nationally. Businesses are hiring, but we are not yet seeing that translate into meaningful increases in pay.

“The bottom line is Kiwis are not seeing their wages grow and it will feel like a real loss given inflation.”

How the sectors stand up

Sector data shows employment growth is concentrated in parts of the economy, with Construction and Trade Services up 5.0% and Accounting, HR and Legal up 4.8% over the past three months.

The Healthcare and Community Services sector, which has faced a peak winter flu season, increased headcount by 2.1% in the last quarter; however, year-on-year wage growth declined -6.1%.

Other sectors contracted over the quarter, including Education and Training (-1.9%), Retail, Hospitality and Tourism (-1.6%) and Agriculture, Mining and Energy (-0.7%).

Webster says the latest data shows evidence that the SME labour market is improving, but the pace and nature of the improvement varies significantly between regions and across sectors.

“The employment figures are encouraging, particularly in parts of the South Island, but the wage data signals the economic recovery is still a work in progress.”