For the first time in two years a survey measure of employees' current conditions has improved, raising hopes that the worst of the job layoffs from the economic downturn have passed.
The Westpac McDermott Miller employment confidence survey for the December quarter, published today, recorded a lift in its current conditions index to 77.8 from a low of 74.4 in the three months to September.
Despite the improvement, the result still showed pessimists continued to outnumber optimists as far as current employment conditions were concerned, with a reading over 100 needed before optimists gained ascendancy.
The overall employment confidence index edged up 1.3 points in the latest quarter to 104.3, taking it back to the level it was at a year ago.
The overall index was boosted by optimism about the future, with an index of employment expectations barely changed from the September quarter at 122.
Westpac senior economist Donna Purdue and chief economist Brendan O'Donovan said the most encouraging aspect of the latest survey was that confidence was higher due to improved perceptions of current employment conditions, rather than just expectations of what was to come.
On its own, the results suggested the worst of the job layoffs were likely to be in the past, they said.
"Still, the overage message is clearly that labour market conditions remain tough -- just not as tough as they were back in September."
The unemployment rate was likely to keep rising until mid-2010, as employment growth was unlikely to keep pace with population growth in the near term, the economists said.
The survey found fewer respondents believed jobs were hard to get -- at a net 59.5 percent in December, from a net 66.5 percent in September, while a net 15 percent said they were earning more than a year ago, broadly unchanged from September.
A net 16.6 percent of respondents said they expected job opportunities to be plentiful this time next year, up from 14.4 percent in the September quarter, the strongest response to the question in the survey's history.
Meanwhile, a net 36.2 percent said they expected to be earning more, up from a net 34 percent in September.
Perceived job security fell during the quarter, from a net 18 percent in September to a net 13.2 percent now.
The Westpac economists said the lower job security may partly explain why consumer spending had been relatively slow to respond to improving consumer confidence and general economic conditions.
Richard Miller of McDermott Miller said employment confidence grew most in the metropolitan areas, up 2.9 points to 106, and rural centres, up 1.4 points to 104.2. In secondary centres it fell 2.3 points to 102.1.
Optimism among private sector employees continues to grow, lifting 2 points in the December quarter to 106.3, while the employment confidence of public sector employees remained virtually unchanged at 101.8.
Employment confidence among private sector employees has now been growing faster than among public sector employees since June, so the gap in confidence between the two groups was widening, Mr Miller said.
"This trend is strongest in the metropolitan centres where belief in an accelerating economic recovery appears to be held most strongly by the private sector, whereas public sector employment confidence continues to be restrained as a result of Government policies to contain growth in its own expenditure."