Otago, Southland employment confidence drops

Employment confidence in Otago and Southland fell in the three months to September, but Southland remains in positive territory.

The latest Westpac McDermott Miller employment confidence index shows Otago's confidence falling to 96.7 points in September, compared with 97.3 in June and 100.7 in September last year.

Southland's confidence fell to 109.1 in September, compared with 113.1 in June and 111.9 in September last year.

The Otago result was the lowest nationwide.

Nationally, the index fell to 104.2 from 106.1 in June.

A reading above 100 indicates more optimists than pessimists, and below 100, more pessimists than optimists.

Otago-Southland Employers Association chief executive John Scandrett said the results aligned with what he had seen recently in other assessments of regional employment confidence levels.

"For example, across both Otago and Southland our own manufacturing sector survey activity through recent months has delivered results around employment that have marginally exceeded the positive-tracking national readings.

"Another indicator that adds weight to the validity of today's survey results can be seen when the separate Southland and Otago figures are reviewed. Otago, in marginally negative territory, comes in behind a strong Southland result overall," he said.

That result was probably because the Otago-based tourist and hospitality sectors had been under performance pressure for some months.

In the association's service sector surveys for the most part of this year, the employment activity readings had consistently been in negative territory, Mr Scandrett said.

Westpac chief economist Dominick Stephens said the fall in employment confidence was at odds with Monday's consumer confidence survey, which showed overall consumer confidence remaining stable.

"That said, it wasn't a big move and employment confidence continues to suggest a gradual decrease in unemployment from where it is today.

"Overall, both surveys are pointing to a bruised, but cautiously optimistic consumer."

The results of the survey suggested expected labour-market pressures from the rebuilding of Christchurch were largely confined to the Canterbury region, he said.

A similar message emerged from the June-quarter wage data, which showed much stronger construction-sector wage increases in Canterbury than elsewhere.

"In view of other signs of worrying inflation pressures at a very early stage of reconstruction - from rocketing construction costs to high and rising inflation expectations - that will be of some comfort to the Reserve Bank," Mr Stephens said.