This in contrast to the plunge in consumer confidence in recent surveys
New Zealanders remained confident about the jobs market, although it might have already passed “peak overheating.”
This was according to the latest Westpac McDermott Miller Employment Confidence survey, which revealed a 1.5% uptick in employment confidence to 109.5 in the March quarter, as the unemployment rate remained close to a multi-decade low, at 3.4%.
The increase was fairly modest compared to the seven-point drop in the three months to December.
“In contrast to the plunge in consumer confidence in recent surveys, people’s feelings about the jobs market remain firmly on the positive side,” said Michael Gordon (pictured above), Westpac senior economist.
People’s perceptions about current job opportunities, a useful lead indicator of the unemployment rate, fell for the second time in a row this quarter, the survey found.
“The survey result is consistent with our view that we’ll see a further rise in unemployment in coming quarters – albeit not a very rapid one, and perhaps more a matter of employment falling behind the pace of population growth, rather than outright job losses,” Gordon said.
Perceptions about job opportunities in the year ahead were somewhat flat in March (0.2%), following a sharp decline in December (16.6%).
“That’s come at a time when both the Reserve Bank and private forecasters (including us) have been giving starker warnings that the fight against inflation is likely to result in recession,” Gordon said.
The March quarter also saw an uptick in past and expected earnings growth, although they remained within their recent changes, and were relatively low compared to history.
“As we’ve noted before, it may be that households are responding to this on an inflation-adjusted basis,” Gordon said. “Average pay rates are now rising faster than they have in decades, but that’s only been enough to keep pace with inflation; few households will feel like they’re getting ahead.”
Confidence was higher in most regions, including, interestingly, in cyclone-ravaged Gisborne and Hawke’s Bay, with perceptions about future job opportunities the main driver for these regions.
“While the cyclone has been immensely disruptive to people’s lives and livelihoods, the recovery process will also generate a significant amount of work in the year ahead,” Gordon said.
The most upbeat parts of the country, meanwhile, were the Nelson/Marlborough/West Coast regions, while Otago saw the biggest increase in confidence for the quarter. Both these areas have seen a strong lift in jobs growth due to the reopening of borders and the influx of overseas tourists.
Wellington and Canterbury were the only two regions to buck the trend, with the former experiencing a fall in past earnings growth and job security, and the latter down on most of the survey questions, Westpac reported.
Use the comment section below to tell us how you felt about this story.
