Almost 4500 more people have signed up to the Jobseeker Work Ready benefit since the start of May - and more grim data about the state of the country's businesses could foreshadow more job losses.

Stats NZ released data last week shows that non-financial businesses are spending more than they earn in the March quarter, a continuation of a trend that has been seen in four of the past five quarters.

This calculation includes non-cash factors such as depreciation, but paints a similar picture to other data released in recent months showing sharp declines in gross domestic product per capita and in business profits.

ANZ senior economist Miles Workman says that in better times, it could mean that the economy is on the verge of a resurgence and businesses are borrowing to invest in new plant and machinery.

"That's not what is happening right now. What is happening right now is consistent with where we think we are in the business cycle - businesses are facing still high costs to produce goods and services, high labour costs, interest costs, transport costs, fuel costs. Some are still rising at a relatively healthy clip.

"Meanwhile, consumers are tightening their belts and watching pennies, they're more choosy about where they spend their money and how much. Businesses are wearing these costs and profitability takes a hammering in that world."

He says eventually businesses will have to readjust how much they spend on things like staff. 

Data from the Ministry of Social Development shows that there were 13,668 more people on Jobseeker Work Ready in May than a year earlier, an increase of 14 per cent. Another 2052 went on to the benefit in the month of May alone.

Since then, weekly reporting data shows another 2450 signed up to the benefit through June.

'Hard to increase productivity'

ASB senior economist Mark Smith says it shows how much the non-financial corporate sector is losing.

"That is important because these firms tend to employ people and if they are losing money, if they cannot see scope for them to increase sales or prices, given we are in a policy-induced recession, it's hard to increase productivity - that's the key but our track record hasn't been good. The last thing they can do is look at cost-cutting."

He points to the recent quarterly survey of business opinion which shows businesses are under considerable margin pressure and looking at cutting hiring. Treasury data also shows the corporate tax take is still well below where it was last year.

"That will flow through… which will hit the household sector."

He says the weakness in corporate profits is why ASB has brought forward its forecast for the first official ash rate (OCR) cut to the end of this year instead of February next year.

"The other thing is the impact on wages… we've got a much weaker corporate sector, it's not going to be in a position to offer wage increases to the extent it had."

He says the public sector job cuts have attracted a lot of attention but are "small beer" compared to what is happening in the wider corporate sector.

Westpac chief economist Kelly Eckhold says the Reserve Bank seems surprised at its last monetary policy update that households and businesses have not adjusted more quickly to the tighter monetary environment.

"They thought because people had been expecting there might be interest rate cuts coming around the corner for a while, it might have meant people just held on and had not got rid of people they don't currently have something to do with."

He says the labour market has proven to be more resilient than the Reserve Bank has forecast, but that will have to change if activity doesn't pick up for businesses.

-RNZ.