New Zealanders’ perceptions about the labour market improved in September, more than reversing their dip in June. The Westpac-McDermott Miller Employment Confidence Index rose to 115.2 this quarter from 108.5 in Q2 2022, taking it to its highest level since June 2019. 

Despite the strength in employment confidence, the Index noted that there continues to be a stark divide in terms of what’s driving it.

While New Zealanders are ‘upbeat’ about the range of job opportunities, they are still not reporting much movement on pay rates. The share of households reporting higher earnings rose in the September quarter, but remained well below pre-pandemic levels, and expected earnings growth held at close to its lowest levels in the history of the survey.

Median weekly wages and salaries were up 8.8% over the year to June. However, this has happened at the same time that the cost of living has soared. Consumer prices rose by 7.3% in the year to June.

The lift in employment confidence was concentrated among younger respondents, who were more upbeat on every measure. At the same time, confidence was stronger among the middle to high income brackets, while it was actually weaker for those in lower income brackets.

By region, the results saw strong gains in Auckland, the Waikato and Wellington. Wellington leapt into the top ranking for the September quarter. The Wellington jobs market is notably tight, with one of the lowest unemployment rates in the country at around 2.7%.

Otago, one of the big improvers in previous quarters, fell sharply to the bottom of the rankings.

The Westpac-McDermott Miller Employment Confidence Index summarises responses to five questions: households’ perceptions of current and future job opportunities in New Zealand, their own actual and expected earnings, and expected changes in their own job security.