Worker confidence in job market returns - survey

Workers are feeling more upbeat about their jobs in the wake of better than expected economic news, according to a bank survey.

The Westpac McDermott Miller employment confidence index, released today, lifted 6.9 points between the June and September quarters to reach 103.0.

An index above 100 indicates more optimists than pessimists.

"Confidence in the labour market situation has continued to build in the last few months," said Westpac senior economist Donna Purdue.

"This is the second biggest quarterly gain since the survey began in June 2004, and brings confidence back above the key 100 level."

It showed labour conditions remained extremely tough, however employees continued to be buoyed by the hope that 2010 would be a whole lot better, she said.

The unemployment rate was expected to push higher in the September quarter and wage growth to slow further, she said.

Westpac expected the unemployment rate, currently at 6 per cent, to peak at 7 per cent in mid 2010.

Yet employees were far more cheerful about prospects a year from now.

They were also more upbeat about their pay outlook - a net 34 per cent of respondents expect to be earning more next year, up from 28 per cent in June.

The flood of better than expected economic news in recent months, both globally and locally, would be contributing to improved labour market expectations, Purdue said.

However, the most telling result in the survey was the improvement in perceived job security, she said.

A net 18 per cent of respondents said that they expected to be more secure in their job over the coming year, up from a net 7.2 per cent in June and well off the record low in March when a net 1 per cent expected to be less secure.

Job security is now at its highest level since the December 2007 quarter, when it was at a net 20 per cent.

"If employees are feeling more secure, and expect job opportunities to be more plentiful in the coming year, then they are more likely to be willing to spend and may even perceive themselves to be in a better position to demand higher wages."

Growth in employment confidence remained stronger among private sector employees, up 9 points over the quarter, than among public sector employees, up only 4.4 points, said Richard Miller, managing director of strategic planning consultancy McDermott Miller.

"So the gap in confidence between the two groups has been bridged, reflecting growing confidence in the private sector the it will lead economic recovery and anxiety in the public sector that calls for increased productivity mean restructuring and job reductions."

- NZPA