NZ employees more upbeat about labour market, less so on wages
New Zealanders became more optimistic about the state of the labour market in the second quarter as strong economic growth continued to generate jobs, although they're less upbeat about the outlook for wages.
The Westpac McDermott Miller employment confidence index rose 3.5 points to 113.4 in the June quarter, the highest level since before the global financial crisis in 2008, with the present conditions index up 4.5 points to 113.9 and the employment expectations index gaining 2.8 points to 113.1. New Zealand's unemployment rate fell to 4.9 percent in the March quarter as employment growth outpaced an expanding population, and the country's participation rate is at a record 70.6 percent.
"Strengthening employment confidence has come on the back fo continuing economic growth in recent years and the related increases in the demand for labour," Westpac Banking Corp senior economist Satish Ranchhod said in his report. "Workers have reported strong gains in the number of available jobs in recent years. They are also reporting increased job security, and that they expect job openings to continue growing over the coming year."
New Zealand's strong run of economic growth has been supported by a nationwide construction boom, record tourism, strong inbound migration, and the recent recovery in the dairy sector. While employers have been able to provide work for the net inflow of migrants, which has largely kept wages flat, even as firms find it increasingly hard to attract skilled labour.
Today's employment confidence survey shows of the 1,555 people surveyed, a net 28 percent experienced past earnings growth, down from 30 percent in the March quarter, and a net 28 percent expect their wages to increase, down from 30 percent in the prior period.
Ranchhod said earnings expectations were "noticeably lower among those earning less than $50,000 per annum" but were below average for all income groups.
"Earnings growth will be a key area to watch over the coming year," Ranchhod said. "And while some of the increase in prices may be temporary, if this isn't matched by an increase in wage growth, many households may find their purchasing power being eroded."
The survey showed a net 0.1 percent of those surveyed saw fewer job opportunities, an improvement from a net -12 percent in March, while pessimism about expected job opportunities also improved to -4.3 percent from -9.5 percent.
More people were happier with their job security at a net 15 percent saying they expect to be more secure over the coming year compared to 11 percent in March.