Monday 14th July 2008
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The Bank of New Zealand-Business NZ Performance of Service Index (PSI) fell to 45.6, the lowest since the survey was started last year. The biggest decline was in the employment sub-index, which dropped to 41.8 from 46.8. A reading below 50 indicates a contraction.
"This fits with a number of other measures that warn us the jobs market is about to come off the boil much more obviously than has been the case in the official records to date," Craig Ebert, Bank of New Zealand's senior market economist, said in a report.
Younger workers may get "the rudest shock" from the dimming labour market because their experience of recent years would suggest boom times are the norm, Ebert said.
Employment fell by the most in 19 years in the first quarter, Statistics New Zealand said in May. The unemployment rate rose to 3.6% from 3.4%. Wages for non-government workers rose 3.5%, excluding overtime in the year to March, according to Statistics New Zealand's labor cost index.
The PSI tallies with the New Zealand Institute of Economic Research's Quarterly Survey of Business Opinion this month, which showed a net 6% of firms expect to reduce workers in the next three months, up from zero in the previous survey.
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