Improving labour market boosts confidence

Dominick Stephens.
Dominick Stephens.
Employment confidence for the three months ended June is back to levels last seen before the Global Financial Crisis, the latest Westpac McDermott Miller Employment Confidence Index shows.

At the end of June, the index stood at 109.9 points, compared with 108.4 at the end of March.

Westpac chief economist Dominick Stephens said while the economy had been gradually accelerating for a few years, it was only more recently New Zealanders had observed a sustained improvement in the jobs market.

''The June quarter survey suggests the labour market has continued to improve,'' he said.

Otago was one of four regions to report a fall in employment confidence in June, down 0.8 points to 102.5.

Nelson/Marlborough/Westland was down 4.1, Gisborne/Hawkes Bay was down 0.5 and Waikato was down 17.1.

Auckland and Canterbury dominated the confidence index, with Auckland on 117.3, up 4.2, and Canterbury on 115, up one.

Mr Stephens said Canterbury had been a star performer over the past two years, given the amount of work generated by the post-earthquake reconstruction.

Recent surveys had shown the rest of the country was starting to close the gap.

In the June survey, Auckland overtook Canterbury as the most confident region.

Auckland was the only region where confidence was above its historic average, he said.

The survey was now 10 years old and more or less covered a complete economic cycle.

''Before leaping to any conclusions about regional disparities, we need to keep the starting points in mind.

"Auckland's unemployment rate rose by more than the rest of the country during the recession and has been slow to improve since then,'' Mr Stephens said.

Given Auckland accounted for about a third of the nation's workforce, any evidence the region was no longer underperforming would be welcomed, he said.

The survey was conducted from June 1 to 10 with a sample size of 1565.

A index number above 100 indicates optimists outnumber pessimists.

Within the index's five components, there were three increases and two falls.

Households' perceptions of current job opportunities were the biggest contributor to the rise in the index, rising from a net -32% to -26.5%, the least negative reading since December 2008.

Expectations of job opportunities a year from now fell from a net -3.4% to -41.%.

The net percentage reporting a rise in earnings over the past year fell slightly to 28.4% after seven straight quarters of gains.

Expectations for an increase in earnings over the coming year rose from a net 31.1% to 34.2%.

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

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