Nearly all New Zealand businesses are looking for staff. Photos / NZME
Nearly all New Zealand businesses are looking for staff. Photos / NZME
Employment confidence ticked up in the March quarter but is off its highs amid signs that the labour market has passed “peak overheating”, according to the latest Westpac McDermott Miller Employment Confidence survey.
Employment confidence rose by 1.5 points to 109.5 in the quarter, and perceptions about the jobs marketremain firmly positive on balance.
Confidence about earnings remains subdued, as wage growth continues to be eaten up by the rising cost of living.
“In contrast to the plunge in consumer confidence in recent surveys, people’s feelings about the jobs market remain firmly on the positive side,” said Westpac acting chief economist Michael Gordon.
“And understandably so: the unemployment rate remains close to a multi-decade low, businesses are still fighting to find more workers, and they are increasingly willing to pay to attract or retain them.”
But there were signs emerging that it’s not quite as overheated as it once was, he said.
“People’s perceptions about current job opportunities fell for the second time in a row this quarter. This measure has tended to be a useful lead indicator of the unemployment rate, which has already ticked up to 3.4 per cent from a record low of 3.2 per cent last year,” he said.
“The survey result is consistent with our view that we’ll see a further rise in unemployment in coming quarters – albeit not a very rapid one, and perhaps more a matter of employment falling behind the pace of population growth, rather than outright job losses.”
Perceptions about job opportunities in the year ahead were about flat in March, after a sharp drop in December.
“That’s come when the Reserve Bank and private forecasters - including us - have been giving starker warnings that the fight against inflation is likely to result in recession,” Gordon said.
Past and expected earnings growth picked up in the March quarter.
However, they remained within their recent ranges and were relatively low compared to history.
“As we’ve noted before, it may be that households are responding to this on an inflation-adjusted basis. Average pay rates are now rising faster than they have in decades, but that’s only been enough to keep pace with inflation; few households will feel like they’re getting ahead.”
The Westpac-McDermott Miller Employment Confidence Index summarises responses to five questions: households’ perceptions of current and future job opportunities in New Zealand, their own actual and expected earnings, and expected changes in their own job security.
The survey took place over the period March 1-14. The sample size was 1559.
Confidence was higher in most regions the survey found – even in cyclone-ravaged Gisborne and Hawke’s Bay.
Perceptions about future job opportunities were the main driver for these regions.
“While the cyclone has been immensely disruptive to people’s lives and livelihoods, the recovery process will also generate a significant amount of work in the year ahead,” Gordon said.
Westpac acting chief economist Michael Gordon. Photo / Supplied
The Nelson/Marlborough/West Coast regions remained the most upbeat parts of the country, while Otago saw the biggest lift in confidence for the quarter.
Both of these areas had had a strong lift in job growth since the border was reopened and overseas tourists began to return in large numbers.
Wellington and Canterbury were the only two regions to buck the trend. Wellington was marked by a fall in past earnings growth and job security, while Canterbury was down on most of the survey questions.
A survey of 550 businesses this week by the Employers and Manufacturers Association (EMA) found 90 per cent of businesses were struggling to fill vacancies, and nearly a third have had roles in the market for more than six months, according to the survey of nearly 550 businesses, from 17 sectors across a range of business sizes.
Only 12 per cent of respondents did not have any vacancies and just 22 per cent of respondents said that the situation in terms of filling vacancies and talent gaps has improved over the past six months.
Yesterday StatsNZ’s Monthly Employment Indicator (MEI) for February showed that the number of filled jobs rose 0.4 per cent for the month.
