Employment confidence dims in June quarter as workers fear for job security

New Zealanders grew more pessimistic in the June quarter as they grew increasingly worried about job security as a swelling population increases competition for work and continues to keep a lid on wages.

The Westpac-McDermott Miller Employment Confidence Index fell 3.3 points to 101.5 in the June quarter, giving up gains in the previous quarter and running below its five-year average. A reading above 100 indicates optimists outnumber pessimists. The present conditions index fell 2.1 points to 97.6 while the employment expectations index dropped 4.1 points to 104.2.

New Zealand's labour market has been improving this year as booming construction and tourism sectors underpin economic activity, while record net inflows of migrants have buoyed consumer demand. That expansion has created new jobs, though the growing population has led to a larger workforce, keeping wages static.

"Headline GDP growth has been bolstered by strong population growth, but per capita GDP growth remains weak," Westpac New Zealand chief economist Dominick Stephens said in a statement. "While jobs growth has been strong to date, the survey suggests that workers are acutely aware they face stiff competition for jobs."

A net 5.3 percent of the 1,555 respondents said they had expected more job security over the coming year, down from 12.8 percent in the March quarter, while a net 28.4 percent said jobs are hard to get at the moment, an improvement on the net 28.8 percent reading in March. Workers were more pessimistic about their opportunities, with a net 17.1 percent picking it will be harder to get a job in a year's time, up from a net 15.8 percent in the March quarter.

Earnings expectations were also weak, with a net 23.6 percent of respondents paid more now than they were a year earlier, down from 28.2 percent in March, and a net 24.4 percent expecting to get a pay rise in 12 months' time, down from 27.8 percent in the March quarter.

Canterbury was the most optimistic region for employees as the rebuild continues to support jobs in and around Christchurch, followed by Bay of Plenty, which is seeing an increase in building activity. Waikato and Taranaki/Manawatu-Whanganui, which have large dairy industries, recovered some lost confidence as tumbling global dairy prices have stabilised, while Gisborne/Hawke's Bay staff grew increasingly pessimistic, having previously basked in upbeat tourism, viticulture and horticulture sectors.

(BusinessDesk)