Employment confidence dips to near 2020 lows across New Zealand
The Westpac-McDermott Miller Employment Confidence Index recorded a decrease, dropping 3.3 points to 88.3 in the March quarter.
This downturn erased the slight gains observed in the December quarter, positioning the index near its lowest levels since the initial COVID-19 lockdowns in 2020.
Overall confidence dipped across several metrics of the survey, except for a marginal improvement in the outlook for job opportunities one year ahead.
Regional disparities mark NZ employment confidence dip
The decline in employment confidence was not uniformly distributed across New Zealand.
Notably, only four out of the 11 surveyed regions experienced a drop, with Auckland’s significant downturn heavily influencing the national average.
Additionally, confidence faltered in Canterbury, primarily outside of Christchurch, potentially affected by major job cuts like those at the Smithfield meat processing facility in Timaru.
Earnings decline nationwide, agri regions see growth
A sharp decline in reported earnings growth contributed to the reduced employment confidence, reverting to levels akin to those seen in 2020.
Despite this general trend, some regions, particularly those with strong agricultural sectors like Waikato, Taranaki, and Southland, reported substantial earnings growth. This boost is largely attributed to a record high farmgate milk price and better export prices for beef and lamb, although this was not enough to offset the earnings slump in major urban centers.
Job availability dips, unemployment nears cycle peak
Perceptions regarding job availability worsened across most regions, retracting the modest improvement noted in the previous quarter.
This aligns with the broader economic observation that the unemployment rate, currently at 5.1%, is approaching its peak for this cycle.
Despite slight optimism about future job opportunities, expectations for earnings growth and job security slightly declined.
NZ job market stagnates despite rising business confidence
The overall labour market conditions in New Zealand remain challenging.
According to the Monthly Employment Indicator, job numbers are stabilising at best following significant declines mid-last year.
While business confidence surveys indicated some positive shifts in hiring intentions, these have yet to materialise into increased job advertisements, Westpac reported.
Many businesses report retaining staff during economic slowdowns, a strategy influenced by past difficulties in recruiting during the 2021-2022 boom.
This has led to some companies finding themselves overstaffed, hesitating to hire even as demand begins to recover, the Westpac-McDermott Miller Employment Confidence survey found.
