More employers consider hiring as demand returns

The number of firms wanting to take on new staff has grown to its highest level in nine months, according to recruitment company Hudson.

Hudson's employment expectations report found 19.6 per cent planned to take on more permanent staff in the next three months - up from 10.8 per cent in October.

The number of companies planning to reduce staff fell from 11.2 per cent to 8.2 per cent.

Hudson New Zealand executive general manager Marc Burrage said employers were being buoyed by more confidence in the economy and a pick-up in demand.

"The commentary is all pointing towards growth expectations this year."

Hiring intentions dropped dramatically in mid-2008 as the global financial crisis sank to a low point halfway through last year.

Burrage said the January figures were the best results seen since mid-2008 but were still lower than before the crisis. "We are still not back to pre-recession levels."

He also warned that improved intentions would not instantly reduce the unemployment rate.

"Unemployment [now 6.5 per cent] always lags and we expect unemployment still to increase to 7 to 7.5 per cent by the middle of the year."

Last year many firms were taking on contractors so they could increase or decrease staff on a needs basis. But that had now moved to employers wanting more permanent staff.

"Confidence is the key component. Positivity has a large part to play."

Burrage said hiring intentions varied across industries.

The IT industry remains the most upbeat with 40.4 per cent intending to hire more staff - up from 25 per cent.

Burrage said even those areas hardest hit - manufacturing and the financial services industry - had picked up.

Manufacturing was up from 0.7 per cent last quarter to 18 per cent while 21.2 per cent of employers in the financial section planned to take on more staff.

Burrage said the lower North Island was the only region to show a decline with sentiment falling 4.4 points to 17.8 per cent, squeezed by Government tightening in Wellington.