Employment across the South Island has remained resilient, with key benefits for the hospitality industry and its workforce.
There is a clear split emerging across the country, and it matters for operators deciding what to do next. The latest employment indicators from Infometrics show the South Island still adding jobs, while the North Island has only managed to stop the decline. For hospitality, that gap feeds directly into spend, staffing, and how much risk you take on.
Filled jobs lifted 0.3 percent in March, following a revised 0.2 percent increase in February. It is the first time since October 2023 that there have been two months of growth in a row. That tells you the market has at least stabilised. It does not tell you demand is back.
The more relevant number is the split. South Island jobs are up 1.5 percent year on year. The North Island is flat. That is not a rounding difference. It is a signal of where income is still flowing through local economies.
Infometrics points to agriculture and mining as the base of that South Island performance. Those sectors are still employing, which supports regional spending. It does not directly fill seats, but it underpins the kind of day-to-day trade that keeps cafés and restaurants ticking over.
At a regional level, the West Coast and Southland are still growing. These are not high-growth hospitality markets, but they are not dropping away either. In the current cycle, stability carries weight.
For operators, this is about reading the room correctly. The South Island is not a growth story. It is a steadier trading environment. That changes how you approach range, pricing, and staffing. You plan for consistency, not spikes.
The service sector added just over 4,600 jobs in March. Hospitality sits inside that, but on an annual basis the sector is still down. What has changed is the rate of decline. It is easing. That points to a market that is levelling out, not one that has turned.
There is a small signal coming through retail as well. Jobs lifted 0.1 percent year on year, the first increase since late 2023. That matters. Retail stabilising tends to feed into hospitality, but it is not immediate. It is a lead indicator, not a result.
That is one side of the ledger. The other side is cost.
Infometrics flags rising fuel prices as a risk to the recovery. The impact is straightforward. Freight costs lift. Suppliers adjust. Households pull back on non-essential spend. That hits hospitality quickly.
You end up managing both sides at once. Input costs are higher, but pricing has limits. Customers still come in, but average spend is tighter. That is where margin gets squeezed.
There is also a labour shift that is not short term. Jobs held by those under 30 are down 1.8 percent year on year. That is the 32nd consecutive fall. At the same time, employment is growing among over-30s.
For hospitality, that changes the operating model. The traditional pipeline of younger staff is smaller. Recruitment takes longer. Wage expectations move. Rosters become harder to balance. This is not just availability, it is cost.
Female employment is also lifting, supported by education and healthcare. It is not directly tied to hospitality, but it reflects where job growth is sitting, and where competition for labour is coming from.
So what does this mean commercially?
In the South Island, the focus is on holding position and managing for steady trade. The employment base is still there. That supports the rate of sale at a local level, even if growth is limited. Range decisions, labour hours, and procurement all need to reflect that steady, not expanding, demand.
In the North Island, the priority is still stabilisation. Flat employment is an improvement, but it does not support expansion. Operators will stay tight on costs, review ranges more frequently, and manage labour carefully.
Across both, the risk is timing. The labour market has stopped declining, but it has not built enough strength to absorb another cost shock. Fuel alone could be enough to slow things again.
For hospitality, this is a base to build from. With the right calls on staffing, pricing, and range, there is enough in the market to move forward, even if progress is measured.
Subscribe to the Restaurant & Café newsletter for weekly industry updates and event coverage.
