Friday 20th January 2017
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New Zealand employment confidence rose to its highest level in eight years as Kiwis grew more upbeat about the prospect of wage increases and less pessimistic about job opportunities in what's seen as a robust labour market.
The Westpac-McDermott Miller Employment Confidence Index rose 2.6 points to 112.7 in the December quarter, adding to an 8.5 point increase in September and taking the measure to its highest level since 2009. A reading above 100 indicates optimists outnumber pessimists. The present conditions index advanced 5.5 points to 112.3 and the future conditions index edged up 0.7 points to 112.9.
"Increases in employment confidence have been broad-based," Westpac Banking Corp's acting chief economist Michael Gordon said in a statement. "The largest gains have been seen in the regions, with the improved outlook for the dairy sector a likely factor that has supported confidence in the labour market and economy more generally."
New Zealand's economy is expected to continue expanding at a decent clip in 2017 as the recovery in global dairy prices adds a third leg to the nation's growth, which was propelled by a major construction pipeline and unprecedented tourism levels.
The survey showed the biggest gains in employment confidence were in Gisborne/Hawke's Bay and Taranaki/Manawatu-Whanganui, provinces that have benefited from the dairy recovery and strong fruit prices. Waikato, which is also reliant on the dairy sector, showed the third biggest improvement in confidence.
An expanding population has been soaked up by that economic growth with new jobs created to absorb more people, though that's kept wages relatively stagnant over the past two years. However, with rising oil prices and a disrupted supply chain set to inject inflationary pressures and the building sector still struggling to find labour, wages are also expected to start rising.
Of the 1,554 respondents surveyed, a net 29.8 percent experienced earnings growth in the December quarter, up from 26 percent in September, and 28.8 percent anticipate a pay rise, up from 24.9 percent.
Westpac's Gordon said workers were still concerned about wage growth and as consumer prices start rising that "could erode households' purchasing power".
Employees grew less pessimistic about the jobs market, which employers have been saying it becoming increasingly competitive. A net 5.1 percent said it was hard to get a job in the quarter, compared to a net 12.4 percent in September, while a net 4.9 percent expect it to be harder to get a job in a year's time, down from 6.8 percent.
However, a net 14.9 percent of those surveyed felt secure in their job, down from 18.6 percent in September.
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