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NZ employment confidence has record drop in June quarter

Tuesday 1st July 2008

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New Zealand employment confidence in the June quarter had the biggest drop since the Westpac McDermott Miller started the survey in 2004.

The index of employment confidence fell 8 points to 120.8 as New Zealanders became less optimistic about the availability of jobs. An index reading above 100 means optimists still outnumber pessimists.

"Employees are increasingly coming to the realization that the current economic downturn will result in some job casualties," said Donna Purdue, senior economist at Westpac, in a statement.

Some economists predict New Zealand's economy shrank in the first half of the year, as consumer confidence plummeted to the lowest since the last recession in 1991. Some 29,000 jobs were lost in the first quarter, a "shocking employment outturn," Purdue said, citing government figures.

The biggest declines in confidence were in Waikato and the regions of Nelson, Marlborough and West Coast, the survey showed. Confidence stayed relatively high in Canterbury and Southland, and may have been buoyed by record payments to dairy farmers, Purdue said.

Government workers are the most gloomy about the availability of jobs. Public sector anxiety may have been stoked by the prospects of a change of government, McDermott Miller managing director Richard Miller said.

The National Party has vowed to trim the size of the public service.

Workers were more optimistic about their own pay, with 84% saying they earned more or the same than a year ago, from 85% in the March survey.

The survey of 1,556 was conducted From June 1 to June 15 and has a margin of error of 2.5% at 95% confidence.

By Jonathan Underhill

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