The Wrap: Supply Chain Market Update

In this edition of The Wrap, Founding Partner Ken Webb gives an update on what is happening in the Supply Chain, Operations and Procurement job market.

The macro level

Global supply chains are still being impacted as a result of Covid -19 with manufacturing and shipping challenges in particular continuing to disrupt the supply and movement of goods around the globe. Of note, and a small example, was the impact the recent ship stuck in the Suez Canal had on the movement of traffic.

Importers, exporters and consumers are certainly feeling the effects of the backlog and on-going disruptions here. These are some of the factors feeding into a mixed economic performance. The latest figures from Stats NZ show that the New Zealand economy contracted in the December quarter, with the largest ever fall in GDP of 1%. A decline in activity in the construction, retail and accommodation industries were some of the main contributors to this result. While the reduction in GDP was significant, it was a lot less than was predicted by economists at the start of the pandemic.

Moving on to the unemployment rate, this too remains a lot lower than anticipated a year ago with the rate falling 0.4% to 4.9% in the December 2020 quarter.

A quick look at the ANZ’s Truckometer, economic indicators that use traffic volume data from around New Zealand as a proxy for economic growth, showed another increase in March 2021 from the previous month despite the uncertain outlook. Light traffic (an indicator of momentum in the economy) was up 1.7% from February 2021 and heavy traffic (a measure of real time goods production) was up 2.8%.

As far as business confidence goes, the ANZ’s preliminary data for March 2021 points to a decline here.

So a bit of a mixed bag, and it will be interesting to see how the economy performs in subsequent quarters. In the meantime, there are a lot of elements that could come into play and make the question of “what next?” a bit more difficult to respond to with any certainty.

One thing we do know though is that immigration, or the lack of it, will increasingly impact the Supply Chain sector.

In previous years, approximately 20% of our pool of placements came from skilled migrants. That source of talent doesn’t exist now and we’re yet to really see if this leads to labour shortages in particular categories. Furthermore, those migrants hoping to relocate to New Zealand might set their sights on other countries that are accepting, or are soon to re-open, residency applications.

Minister of Immigration Kris Faafoi has said a review of the skilled migrant category is a priority, and this is something the Government is due to begin looking at shortly.

What this means on the ground

Despite the big picture economically, we are seeing an increase in the demand for Supply Chain, Operations and Procurement professionals.

We are currently recruiting roles across the full spectrum of the Supply Chain, in Auckland and increasingly in the regions. We’re recruiting in the areas of Planning, Demand, Buying, Manufacturing, Production, Logistics and Health and Safety to name a few. The demand for good Supply Chain staff is almost unprecedented and at a level I haven’t seen in the market for a long time.

At the same time, people are still exercising caution when it comes to changing roles. Employment security remains one of the primary drivers for the candidates we are talking with and they are not as willing to take a risk on a new job just at the moment. Added to this, a lot of companies looked after their staff well last year and that loyalty is being repaid.

With a shortage of qualified candidates in the market and no clear timeline from the New Zealand Government on opening the borders to skilled migrants, it will be interesting to see if there is upward pressure on salaries.

Ken Webb is a Founding Partner of Hunter Campbell. Ken specialises in the recruitment of Supply Chain, Procurement & Operations roles. For more news and views visit our website by clicking here, see what opportunities we have available here or follow us on LinkedIn.

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