The post-lockdown rebound in job advertisements are beginning to lose momentum, as businesses lack the confidence needed to take on new staff.
The latest BNZ-SEEK employment report found the number of jobs ads rose a mere 9.8 percent in July, after coming off a strong 46.9 boost in June.
However, listings were down by about 32 percent on the same month a year earlier.
BNZ senior economist Craig Ebert said the strong month-on-month gains in new listings were never going to be sustainable.
"The increase in July itself was close to 10 percent, which in normal circumstances is a huge increase per month, but we're in this process where we're trying to rapidly come out of the hole that was created by the first lockdown."
He said businesses were hesitant about investing in new workers at the moment.
"Firms need to be quite sure that what they're seeing in their business, even if it is looking encouraging, is sustainable.
"It is also worth remembering that a lot of businesses will be at what they consider fully staffed because of the ability to do so through the wage subsidy. So there's not exactly real evidence businesses are laying off staff and are busily rehiring."
Ebert said hiring new staff was secondary, as businesses were waiting to see if trading was sustainable enough to justify the current staffing levels they had.
One of the trends to emerge out of the report was the strong rebound in listings seen in the regions compared with the country's main centres.
Hawke's Bay, Northland and Manawatu were back up very close to their year-prior levels, while Gisborne's job advertising numbers were up 25 percent on the same month a year ago. Whereas Auckland, Wellington and Christchurch were down by 43 percent, 39 percent and 42 percent respectively.
Ebert said there is a trend where the smaller the region the better it's recovered in terms of job advertising but again there are broader headwinds still to face and the latest outbreak of Covid-19 cases is the latest challenge to consider.