Source: EMA
Economic Analysis – Kiwi labour market remains soft as spare capacity stays elevated – Kiwibank
New labour market figures show the job market remains under pressure, with spare capacity staying elevated and wage growth subdued.
The latest Statistics New Zealand data shows the unemployment rate fell slightly to 5.3% from 5.4% in the March quarter. The participation rate fell to 70.4%, while the size of the labour force grew 0.5% compared to the March quarter of 2025. The underutilisation rate, which includes Kiwi who are unemployed or want more work, remained at 13% (12.9% if we look at the decimal points).
Alexandra Turcu, Kiwibank Economist, says there is still an uncomfortable amount of slack in the labour market: “Businesses are understandably cautious in the current environment, and that’s showing up in slower hiring and very limited movement in pay increases.”
Wage growth remains weak
Wage growth remained low in the March quarter, with most pay rises staying in the 1-2% range.
“This is a tough period for both households and businesses. Costs have been rising for several years, and recent fuel pressures have added another layer of strain. Many businesses are facing higher operating costs at the same time households are already feeling stretched.”
“In that environment, there’s limited room for pay increases, even as the cost of living remains high,” says Turcu.
Underemployment remains elevated
Underutilisation remains high, driven by a mix of unemployment and underemployment.
“When people hear ‘underemployment’, they often think it means a lack of hours, but that’s not always the case. Many underemployed workers are working close to full-time hours.”
“The difference is not how long people are working, but how much they’re earning. That’s why so many working New Zealanders are still looking for more or better-paid work, even though they’re already employed.”
Productivity continues to lag
Data continues to show New Zealand lags other developed economies on productivity, measured by how much value is produced for each hour worked.
“Productivity matters because it’s what ultimately supports income growth over time. If more people are concentrated in lower-paid roles, it limits how much wages can lift across the economy, even when people are employed.”
Turcu says that while this labour market data itself is unlikely to influence the next Reserve Bank decision, it continues to shape the inflation outlook: “With demand already weak, higher prices are unlikely to translate into stronger wage growth. The economy is slowing on its own, which means there is little justification for pushing interest rates higher right now.”
Kiwibank economists expect labour market conditions to remain soft in the near term, with unemployment and underutilisation staying elevated as the economy continues to adjust.
“This period is tough, but it isn’t permanent. When price pressures ease the economy will be able to rebuild. Stronger productivity and better-paying jobs are what ultimately lift incomes in the labour market. The levers that will give this momentum is long-term stability and growth in business confidence,” Turcu concludes.
About Kiwibank
Kiwibank is a Purpose-led organisation that has modern, Kiwi values at heart and keeps Kiwi money where it belongs – right here in New Zealand. As a Kiwi bank, with more than a million customers, our trusted experts are focused on supporting Kiwi with their home ownership aspirations and backing local business ambitions, so together we can thrive here in Aotearoa and on the world stage. Kiwibank is the #1 bank in Kantar’s 2024 Corporate Reputation Index and the only bank in the top 15. To find out more about Kiwibank visit www.kiwibank.co.nz.
Tech – AI BLUEPRINT FINDS HIGH USE OF AI BY KIWIS BUT LOW TRUST
New Zealand's biggest artificial intelligence (AI) industry group says although more of us are using AI every day, trust is not keeping pace with uptake.
The AI Forum New Zealand today published its AI Blueprint for New Zealand1, a significant update on the previous version from 2024. The work included a review of 28 separate reports which showed AI adoption rates ranging from 40 to 80 percent, depending on survey methodology. It found corporate and information workers are adopting AI at high rates, while broader population uptake is lower, especially compared to global measures.
“On the surface, this can make the national picture look contradictory. But a closer look shows a consistent story emerging,” says Forum Executive Director Madeline Newman.
“Many New Zealanders now encounter AI in their daily lives, and a growing number are using it at work in practical ways, particularly for routine tasks and information processing. More intensive or deeply integrated use remains less common, but it is increasing. Importantly, across almost all studies, individuals and organisations consistently report positive productivity gains including time savings and efficiency gains, even where overall use is still relatively light or informal.
“However, trust has not kept pace with uptake. Concerns about privacy, security, IP, bias, job impacts, and transparency are persistent, including among people who already use AI tools. In this sense, New Zealand sits in an uncomfortable position: high-use but low-trust.”
AI Forum Chair Dr Mahsa McCauley says the data suggest the next phase of AI adoption won't be determined by access to technology alone. It will be shaped by how well organisations, government, and society address trust, skills, and governance alongside continued use.
The Forum's vision is for Aotearoa, by 2030, to be a global leader for innovative, responsible and inclusive AI, and to be globally recognised for harnessing the power of AI for the benefit of all New Zealanders.
McCauley says that to help realise this vision, the Forum is already responding to the Blueprint's findings.
Building on its AI in Action productivity research series from 2024/2025, the Forum plans to combine its own independent research with an industry-wide review of existing reports and questionnaires from major generative AI providers.
“Our intention is to provide an uncluttered source of truth on AI adoption and use in Aotearoa. We're also forming a new, dedicated workstream addressing social licence.
“Planning for 2030 also means looking beyond AI in isolation and preparing for the next wave. We need to consider how it intersects with other rapidly advancing technologies, particularly quantum, molecular biology and robotics, and what this convergence means for Aotearoa.”
Newman says that outside of the banking sector, many organisations are unprepared for this shift.
“It's a gap we can't afford to leave unfilled. It's why post-quantum readiness is an area that the AI Forum will investigate in 2026 in collaboration with Tech New Zealand's communities.”
1Link: https://aiforum.org.nz/wp-content/uploads/2026/05/NZT009-AI_Blueprint_Report-v05.pdf
About the AI Forum New Zealand | Te Kāhui Atamai Iahiko o Aotearoa
The AI Forum New Zealand is the country's leading voice for artificial intelligence, bringing together more than 280 members from industry, academia, government, and civil society to shape our AI future. Founded in 2017, the Forum is one of the largest of the 16 communities that make up Tech New Zealand.
Each year the Forum runs dozens of events – including the AI Summit, the AI in Creative Industries Summit, and the nationwide AI Hackathon Festival – makes submissions to government and international agencies, and publishes research reports on AI's impact on productivity.
Transporting New Zealand calls on everyone to Be a Road Safety Hero as part of Road Safety Week
Source: Ia Ara Aotearoa Transporting New Zealand
Fire Safety – Fire and Emergency reminds public to be extra careful while strike action takes place
Source: Fire and Emergency New Zealand
Health – A year after Pay Equity gutted, hardworking nurses even worse off
Health – "It saved my life": Survivor urges nationwide lung cancer screening programme
Source: Asthma and Respiratory Foundation
Animal Welfare – Fast-tracked factory fish farm raises welfare red flags – SAFE
Source: SAFE For Animals
"Everyone Deserves Bodily Autonomy": Supporters Rally in Support of High Court Challenge to Puberty Blocker Ban
Wellington | Te Whanganui-a-Tara – Members of the public supporting the right of trans young people to access gender-affirming healthcare gathered outside the High Court in Wellington today, in support of a legal challenge by the Professional Association for Transgender Health Aotearoa (PATHA) to the Government's ban on new puberty blocker prescriptions for young people with gender dysphoria or gender incongruence.
Puberty blockers are medicines that temporarily pause puberty. They have long been used for conditions such as precocious puberty, and are also used in gender-affirming healthcare where puberty would otherwise cause serious distress. Their purpose is to give young people, their whānau and clinicians time to make informed decisions without the immediate pressure of irreversible pubertal changes.
The Government's regulations, announced in November 2025, singled out trans young people by blocking new prescriptions for gender dysphoria or gender incongruence, while leaving the same class of medicines available for other uses, including precocious puberty, endometriosis and prostate cancer.
The ban was quickly met with widespread opposition from health professionals, medical bodies and trans community advocates. Paediatric endocrinologist Dr Ben Albert described puberty blockers as “generally very safe medications,” explaining that when they are stopped, “puberty restarts.” Dr Rona Carroll, a specialist GP and senior lecturer at the University of Otago, called the ban “a shockingly inappropriate overreach of politics into healthcare,” adding that prescribing decisions should remain between clinicians, patients and their whānau.
In December, the High Court ordered that the Crown take no steps to enforce the ban pending judicial review. Justice Michele Wilkinson-Smith noted that puberty blockers are reversible, that there is no evidence they affect fertility, and that the evidence relating to mental health outcomes suggests the negative consequences of a ban are a more immediate concern.
For many in the trans community, access to puberty blockers was already far too limited.
“Puberty blockers are already a compromise,” said Charlie Sheppard, spokesperson for Queer Endurance in Defiance. “They give young people time. They do not force anyone down a path. What the Government has done is take that limited option away specifically from trans youth, while leaving the same medications available for others. That is discrimination dressed up as caution.”
“Everyone deserves bodily autonomy. That principle goes for abortion, disability care, and medical treatment. It goes for relationships and how you present to the world. That's progress. We don't want to let that progress go. Healthcare decisions should be made by young people, and clinicians — not imposed by Cabinet for political reasons.”
Queer Endurance in Defiance supports PATHA's challenge and calls for the ban to be permanently struck down. The group also calls on the Government to end political interference in gender-affirming healthcare and instead invest in accessible, well-resourced services for trans young people.
Queer Endurance in Defiance is a queer and trans-majority community organisation which has worked since 2021 to oppose transphobia and defend the rights, safety and dignity of queer and trans people in Aotearoa.
Economy – Financial system resilient amid heightened global risks – Reserve Bank
6 May 2026 – “The global risk environment has worsened over the past six months, as conflict in the Middle East threatens world energy supply”, says Reserve Bank Governor Anna Breman in publishing the Financial Stability Report this morning. “However, New Zealand's financial system is resilient and well positioned to support households and businesses even if economic conditions soften.”
The outbreak of conflict in the Middle East and closure of the Strait of Hormuz has created significant disruptions to the world's energy markets, adding to existing geopolitical and trade tensions. The longer the conflict persists the greater the risks will be to global financial stability, and as a small, open economy it is already having significant economic effects in New Zealand.
“Domestically, we have seen the immediate impacts of the conflict in rising fuel costs for households and businesses. High diesel prices are having the most impact on the transport and logistics sectors, as well as primary industries including forestry and fishing. While economic growth had been recovering prior to the conflict, we are now likely to see a somewhat slower recovery, affecting job growth and debt servicing,” explains Dr. Breman.
Banks have strong capital and funding buffers meaning they are well placed to support customers who may be struggling, as well as manage stresses in offshore funding markets. Stress test results demonstrate that banks can withstand significant economic shocks, including geopolitical events like the Middle East conflict.
For insurers in New Zealand, we assess the direct impacts of the Middle East conflict to be limited. Health insurers have needed to raise premiums and adjust policies following several years of high claims costs, and this has improved solvency margins in the sector. This year we are progressing a stress test of life and health insurers.
This edition of the Report includes two special topics on financial stability issues. The first is on access to credit for smaller businesses, highlighting the elevated borrowing costs firms face. There are opportunities to improve pricing transparency so that firms can better understand whether they are getting a good deal. The second topic is on global fiscal sustainability. This discusses rising public debt pressures in major advanced economies and how these may pose a global financial stability risk, which could affect New Zealand. We also provide an overview of general insurance coverage in New Zealand and its link to financial stability.
The report outlines current and recent work to promote an efficient and resilient banking system, building on the more intensive supervision, enforcement and resolution approaches we have been developing in recent years. This includes the outcome of our recent review of capital settings for deposit takers.
