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Employment confidence rises

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Fuseworks Media
Fuseworks Media
Employment confidence rises

The Westpac McDermott Miller Employment Confidence Index rose to 109.9 in the June 2014 quarter, from 108.4 in the March quarter. This is the highest level for the index since September 2008.

"While the economy has been gradually accelerating for a few years now, it’s only more recently that New Zealanders have observed a sustained pickup in the jobs market," said Westpac Chief Economist Dominick Stephens. "The June quarter survey suggests that the labour market has continued to improve."

Employment confidence was net positive for 10 out of 11 regions in the June quarter. "Auckland has now overtaken Canterbury as the most confident region," said Mr Stephens. "Auckland’s unemployment rate deteriorated by more than the rest of the country during the recession, and has been slow to improve since then. In that light, the latest survey suggests that the region’s jobs market is no longer underperforming."

The survey was conducted over 1 - 10 June, with a sample size of 1,565. An index number over 100 indicates that optimists outnumber pessimists. The margin of error is 2.5% for a 95% confidence interval.

Within the index’s five component series, there were three increases and two decreases. Households’ perceptions of current job opportunities were the biggest contributor to the rise in the index, rising from a net -32.0% to -26.5%. This was the least negative reading since December 2008.

In contrast, expectations of job opportunities a year from now fell from a net -3.4% to -4.1%. This measure has been little changed over the last year.

The net percentage reporting a rise in earnings over the past year fell slightly to 28.4%, after seven straight quarters of gains. However, expectations for an increase in earnings over the coming year rose from a net 31.1% to 34.2%.

Respondents’ expectations for their own job security rose from a net 16.8% to 17.6%, the highest since September 2009.

"The Westpac McDermott Miller Employment Confidence Index for New Zealand rose again in June 2014 to 109.9, up from 108.4 in March 2014," announced John McDougall, Director of Strategy Planning Consultancy McDermott Miller. "Employment confidence is again at its highest level since the onset of the ‘Global Financial Crisis’ in late 2008. However, the Employment Confidence Index is considerably below its highest ever level of 135.9, recorded in September 2007 - a year prior to the GFC (the series began in June 2004)."

"June 2014 is the sixth consecutive quarter of employment optimism. In June 2013 the Index stood at 104.2, so the increase over the year is 5.7 points," he noted. "Looking at the questions that underlie the index, the perception that jobs are hard to get has continued to fall - a net 27% now believe this, compared to 32% in March. The net percentage of employees who expect their earnings to increase over the coming year now stands at 34%, up from 31% in March. The net percentage of employees who expect their personal job security to improve over the coming year has inched up from 16.8% in March to 17.6% in June."

"The June Quarter Employment Confidence Index for Private Sector employees was 110.7 in March, some 8.3 points higher than the 102.4 of Public Sector employees. On every constituent question of the Employment Confidence Index, Private Sector employees have a more positive view than their Public Sector counterparts," John McDougall said.

"In the early years of the Westpac McDermott Miller Employment Confidence Index for New Zealand, Public Sector employees were consistently more confident than their Private Sector counterparts. Since September 2009 the reverse has been the case; the switchover coincided with Public Sector employees realising that restructuring under a National-led government meant they would not be protected from the economic stresses of the time. With a third term of that government an increasingly likely prospect, Public Sector employees’ expectations of personally benefiting from the current, relatively healthy, economic outlook remain muted. Private Sector employees, on the other hand, are more confident of personally benefitting from the growing economy," John McDougall concluded.

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