Employee confidence suffers minor snag

Wednesday 24th March 2010

New Zealand employees have little to cheer about with a drop in confidence, though optimism about the future of the labour market shone through, according to the Westpac: McDermott Miller Employment Confidence Index.

The bank’s fourth-quarter index, released today, showed a 0.7 points fall to 103.6 from 104.3 in December 2009, indicating that the optimists are outweighing the pessimists. Jobs are currently hard to get, according to 60% of the total surveyed. This percentage is up from 59.4% in December and as a result, the Current Conditions Index fell to 77.1 from December’s 77.8. There is little doubt that job creation has yet to gain a head of steam, according to the report.

“Employees remain staunch in their view that the labour market conditions will improve over the coming year,” said Westpac Senior Economist, Donna Purdue in the report.

“Despite job opportunities and job security being tempered with this quarter,” the Employment Expectations Index, currently 121.3, isn’t too far below 2004’s record high of 125.1.

New Zealand’s unemployment rate lifted to 7.3% from 6.5% in the three months ended December 31 - a decade high. Still, employees remain confident with a net 14.3% of respondents saying they expect job availability to be plentiful this time next year. This result dropped from the record high of 16.6% in the December quarter. Perceived job security over the coming year also fell, down to 11.6% from 13.2% last quarter.

The US, the world’s largest economy, also has a positive outlook about the strength of the economy and job availability, after the Spherion Employee Confidence Index showed an increase of one point to 50.1 in January. Similar to New Zealand though, US workers revealed they are slightly less confident in their own job security.

Despite the declines, New Zealand’s earnings expectations for this quarter climbed to the highest percentage since September 2008. The figure rose to 28.1% from 36.2% in December.

Yesterday, the New Zealand Institute of Economic Research predicted the real value of wages is set to fall this year, according to a survey of 10 financial and economic agencies, as annual forecast salary growth of 1.9% lags behind an expected inflation rate of 2.4%.

Purdue said the overall results of the survey are consistent with current labour market trends and should pick up once economic activity gathers pace this year, she said.

Businesswire.co.nz

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