Employment confidence highest since global financial crisis

Dominick Stephens, Westpac Banking Corp chief economist

Employment confidence is at its highest level in nearly six years and Auckland has overtaken Canterbury as the most confident region in the latest Westpac McDermott Miller Employment Confidence Index survey.

The index rose to 109.9 in the June quarter from 108.4 in the March quarter. The June quarter level is the highest since September 2008, when the global financial crisis was affecting sentiment.  A number over 100 indicates optimists outnumber pessimists.

Still, the index remains considerably below the 135.9 peak in September 2007, a year prior to the global financial crisis.

Employment confidence was net positive for ten out of 11 regions, and Auckland overtook Canterbury as the most confident region.

“Auckland’s unemployment rate deteriorated by more than the rest of the country during the recession, and has been slow to improve since then,” Westpac chief economist Dominick Stephens said. “In that light, the latest survey suggests the region’s job market is no longer underperforming.”

Households’ perceptions of current job opportunities rose from a net minus 32 percent to minus 26.5 percent, which was the least negative reading since December 2008 and the biggest contributor to the rise in the overall index.

Respondents’ expectations for their own job security rose from a net 16.8 percent to 17.6 percent, which is the highest since September 2009.

The net percentage of people expecting a rise in earnings in the coming year rose from a net 31.1 percent to 34.2 percent but the percentage of people reporting a rise in earnings in the past year fell slightly to 28.4 percent.

The survey was conducted between June 1 and June 10, with a sample size of 1565.

The June quarter was the sixth consecutive quarter showing employment optimism.

Private sector workers are generally more optimistic than public sector workers, and this has been the case since September 2009.

“On every constituent question of the employment confidence index, private sector employees have a more positive view than their public sector counterparts,” John McDougall, director of strategy planning at McDermott Miller said.

(BusinessDesk)

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