Workers turn optimistic on hopes of rebound in 2010

Wednesday 30th September 2009

New Zealand employees turned optimistic in the third quarter as signs of a recovery in the economy stoked hopes of a rebound in 2010.

The Westpac McDermott Miller Employment Confidence Index rose 6.9 points to 103 on a scale where a reading over 100 indicates optimists outnumber pessimists. The gain was the second-largest since the survey began in June 2004, Westpac said.

"Current labour conditions remain extremely tough," said Westpac senior economist Donna Purdue. Still, "employees continue to be buoyed by the hope that 2010 will be a whole lot better."A revival in optimism about employment helps stoke confidence in the economic recovery, as the jobs market tends to lag shifts in the economic cycle.

The New Zealand Institute of Economic Research this month predicted the jobless rate will peak at 7.3% in 2010, the highest in a decade, before falling back to 6.7% the following year. Among recent figures stoking optimism about the outlook, data showed the economy unexpectedly expanded in the second quarter, ending five quarters of contraction.

Today's survey showed that employees are gloomy about their current situation, with the number saying jobs are hard to get rising to 66.5% from 65.3% in June. A net 15% said they are being paid more than they were a year ago, down from 19% in June.

For the year ahead, a net 14% of employees expect jobs to be more plentiful, a turnaround from June, when a net 9% saw the jobs market worsening. A net 34% expect to be earning more in a year's time, up from a net 28% in June.

"The survey adds to the growing list of positive data releases on the New Zealand economy," Purdue said. "The RBNZ must surely be reconsidering the timing of the first rate hike."

Employees feel more secure in their jobs, with a net 18% expecting improved job security over the next 12 months, up from a net 7.2% in June. Thos in the private sector were more optimistic than their counterparts in government jobs, at 104.3 to 102, the survey showed.

Businesswire.co.nz

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