4 minute read
02. Supply Chain, Operations and Procurement Market Update
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Hunter Campbell is the unparalleled experts in the Supply Chain, Operations & Procurement sector. We have the most experienced Supply Chain, Operations and Procurement search and recruitment team in New Zealand. But ours is no ordinary experience; we have the unique advantage of practical expertise, hands-on experience and working sector knowledge.
Clients work with us because we consistently deliver the highest quality candidates, and candidates work with us because we are proactive partners with strong connections to the best brands in the sector.
Our approach brings together specialist expertise, deep understanding, strong relationships, hands-on experience and proactive agility to connect people and culture, acumen and action, IQ and EQ, ambition and outcomes.
We are Hunter Campbell. These are our insights.
A TALENT SHORT LABOUR MARKET
Prior to the arrival of Delta to New Zealand in August 2021 New Zealand’s economy was expanding at more than twice the pace forecast by economists. The impact of New Zealand’s latest lockdowns are yet to be seen, with the RBNZ stating the recent restrictions have not materially changed the medium-term outlook for inflation and employment.
The OCR was raised by a quarter of a percentage point to 0.5% in October, due to strongly rising prices, a hot housing market and tight labour market, with further expected rises to continue over the next six months.
New Zealand’s unemployment rate was (seasonally adjusted) 3.4% last quarter, the lowest we’ve seen since pre 2008 GFC
The level of job vacancies has risen above pre-COVID-19 levels across all the industries and regions, with overall job vacancies increasing well above previous record highs. We suspect that the ongoing border closure and resulting constraint on labour supply is artificially inflating these vacancy numbers.
CHANGING RETURNEE PROFILE
The expected wave of Kiwis retuning to New Zealand following the global impacts of COVID-19, has not eventuated. And although we saw increased engagement from candidates looking to return to New Zealand between April – June 2020, the rates of return have remained stable, and in line with pre-COVID-19 numbers. With easing MIQ requirements on the horizon this flow of returning kiwis may increase.
Interestingly, the people returning to New Zealand have been of a different profile. Rather than the usual professionals returning from the traditional Kiwi OE, we’ve seen an increase in a more experienced demographic; professionals with young families returning home for lifestyle reasons.
This has meant a notable increase in the seniority of the talent entering our market.
We expect that the annual trend of returnees following the European summer will continue this year. With Supply Chain, Operations and Procurement remaining a talent short market, and the serious demand for Leaders – we welcome this injection of talent to the market.
THE ANZ TRUCKOMETER
We use the ANZ Truckometer as a timely and accurate gauge of economic momentum in New Zealand. It is a set of two economic indicators that uses traffic volume data from around the country as a proxy for economic activity. It offers valuable insights - particularly for the New Zealand economy, where large proportions of our freight are moved by road. The Light Traffic Index fell 6.4% in October, while the Heavy Traffic lifted 1.0% month on month. Lockdown restrictions across New Zealand mean that traffic slows have been outside of the norm and the Truckometer indexes are unlikely to be a reliable GDP indicator in the near term. The Light Traffic Index fell 6.4% representing the travel restrictions in Waikato and Auckland domestic travel. The Heavy Traffic Index rose 1.0%, with both light and heavy traffic remain well short of pre-Delta levels.
Heavy traffic has bounced back reflecting that the supply chain is operating across boundaries where personal travel is restricted. As New Zealand moves forward and restrictions ease global experience suggests a strong resurgence in both traffic flows and activity.
THE IMPACT OF THE PANDEMIC
Industries most exposed to the pandemic, and impacted by our closed border suffered the highest job losses, as we’d expect. In ASB’s – Q1 2021 Labour Market Data Review, we saw a fall in the numbers of those employed in Manufacturing (-4%) and Transport, Postal and Warehousing (-5.8%).
However, we note that this reflects a significantly reduced number of people in the country able to fill these roles, rather than a lack of people employed in these roles.
The lack of immigration coming into New Zealand is having a direct impact on our labour force.
Current immigration policy restricts skilled migrants entering New Zealand. This lack of talent entering the country has seen a shift in power in the employment market - with the power now lying with employees, causing an upward pressure on salaries.
Former Chief Science Advisor, Sir Peter Gluckman comments, “The window of opportunity for New Zealand to attract talent is evaporating rather rapidly as the developed world becomes vaccinated. Many Asian countries are now on an aggressive hunt for that talent.”
With no new talent entering the New Zealand market, we see a domino effect throughout the sector, and across all levels. We predict this will hit crisis point over the next 6–18 months.
It’s now more important than ever to create good chemistry between your team and your organisation. Building a workplace culture where your people are valued and treated well is vital.
