More people are now pessimistic about current job landscape
For the first time since March 2021, New Zealanders are no longer optimistic about the state of the labour market, with the Westpac McDermott Miller Employment Confidence Index falling 7.4 points in the September quarter to 98.3.
In Westpac’s new publication, titled Jobs market downturn underway, Darren Gibbs (pictured above), Westpac senior economist, said the 98.3 reading, the lowest for the index since December 2020, was mainly due to a drop in perceptions regarding current job opportunities, which dropped a further 19.3 points this month to -4.7.
“In part this may reflect a reduction in the rate of growth of new job opportunities, as suggested by job vacancy data and hiring intentions indicators in business surveys,” Gibbs said.
“However, it probably also reflects increased competition for those opportunities since the reopening of the international borders,” Gibbs said. “Indeed, in recent months, data published by Seek has indicated that the ratio of job applicants to job vacancies has increased to a record high.”
With perceptions about the availability of jobs traditionally providing a useful lead on the direction of the unemployment rate, the latest reading suggests that the unemployment rate will likely increase over the rest of this year, from its current, still-low level of 3.6%, the report said.
Interestingly, despite the weaker tone of the survey overall, the respondents’ sense of their personal job security remained fairly stable, with only a small net proportion of respondents considering that their job would be less secure over the coming year.
The survey also found that fewer households saw an increase in their earnings over the last year, while the number of households expecting an increase in the coming year was also slightly down – with both measures sitting at historically low levels despite a strong pickup in household earnings growth over the past year.
“Our best explanation remains that people are viewing their situation in inflation-adjusted terms,” Gibbs said. “Those respondents that have been able to secure a cost-of-living pay increase probably still feel that they are not getting ahead. Indeed, last week’s June quarter GDP report pointed to a decline in real gross national disposable income over the past year when measured in per-capita terms.”
Employment confidence was down across all the regions, except in the Bay of Plenty.
“The major population centres of Auckland and Canterbury are now amongst the most pessimistic regions,” Gibbs said. “Perceptions about current job opportunities were down across all regions but especially so in Auckland. The latter may reflect especially intense competition for jobs from new migrants.”
Read the Westpac-McDermott Miller Employment Confidence report.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
