New Zealanders slightly more hopeful about job prospects
In December, the Westpac-McDermott Miller Employment Confidence Index saw a notable increase to 91.6, recovering from a dip in the previous quarter.
While still lingering near the low levels experienced since the 2020 COVID lockdown, the uptick suggests a cautiously optimistic outlook among New Zealanders regarding the labour market.
Perceptions of job availability improve
The key driver of this quarter’s rise was a positive shift in perceptions about job availability, marking the first improvement in this area in over two years.
The index for current job opportunities rose from -50 to -44, indicating a softening yet persistently challenging job landscape.
“This measure has had a close relationship with the unemployment rate over time,” said Michael Gordon (pictured above), senior economist at Westpac NZ.
Gordon added optimism that although the unemployment rate may approach 5%, it is unlikely to climb much higher.
Future job market expectations
Expectations for future job opportunities also saw a modest increase, reflecting growing confidence among New Zealanders that the worst may be behind them.
Although these expectations do not directly correlate with actual labour market outcomes, they represent a positive shift in public sentiment.
Stabilising labour market indicators
Recent data suggests some stabilisation in the job market:
- The monthly employment indicator recorded a 0.3% increase in filled jobs in November, hinting at a potential end to continuous job losses over the past months.
- Job advertisements have leveled off after significant declines, though no increase in hiring has been observed yet.
- Business confidence surveys from ANZ and NZIER indicate a positive turn in hiring intentions, although this has yet to translate into increased employment.
Economic influences and regional variations
Easier monetary policy appears to have bolstered confidence across some sectors, but the full impact on job creation and business expansion is expected to materialise gradually.
The Westpac-McDermott Miller survey also noted little change in earnings growth and job security perceptions, which remained subdued.
Employment confidence increased notably in major centers like Auckland and Christchurch, driven by improved perceptions of job availability.
Meanwhile, regions like Wellington showed only modest gains, and places like Nelson and the West Coast experienced boosts in confidence primarily due to earnings growth rather than job opportunities.
To read the Westpac report in full, click here.
