Employment confidence index takes a dive as people get gloomier about job prospects

Auckland, where respondents in the Westpac-McDermott Miller survey registered the biggest fall in employment confidence. Photo / Michael Craig

Employment confidence took a tumble in the latest Westpac-McDermott Miller survey.

The Westpac-McDermott Miller Employment Confidence Index fell in the June quarter to the lowest levels since late 2020.

“New Zealanders have taken a much dimmer view of the labour market over the last three months,” Westpac senior economist Michael Gordon said today.

“Perceptions about current job opportunities fell sharply in the June quarter, and suggest that a further rise in the unemployment rate is coming in the months ahead.”

He said many people expected unemployment to rise as part of the Reserve Bank’s efforts to tame inflation.

Gordon said a big rise in layoffs had not been detected, “but that may change as the economy’s slowdown progresses”.

GDP in the March quarter declined per capita but grew overall by 0.2 per cent.

Westpac and McDermott Miller said employment confidence was weaker across every region but Auckland had the biggest decline.

“Confidence amongst employees in both the public and private sectors has taken a real knock this quarter, with confidence levels close to those last seen in September 2020,” said Imogen Rendall of McDermott Miller Limited.

“For employees in the private sector, confidence has dropped 19.1 points down to 89.5, and for those working in the public sector, confidence has dropped 11.1 points down to 94.6.”

Rendall said private and public sector employees were very pessimistic about the current availability of jobs, and also gloomy about future job opportunities in a year’s time.

“Private sector employees are also indicating a real concern regarding their future job security. It will be interesting to see how this plays out over the months to come,” Rendall added.

The survey was conducted in the first 12 days of June with a sample size of 1553. Its margin of error was 2.5%.