Employment confidence among New Zealanders rose in the December quarter, but remained below recent highs according to the latest Westpac McDermott Miller Employment Confidence report.

The Index rose by 1.4 points to 99.7 in the December quarter from the prior quarter, leaving it well down on the highs seen in 2021 and 2022. A reading level below 100 indicates that more New Zealanders are pessimistic about the state of the labour market than are optimistic.

Perceptions about current opportunities and job security were weaker again in the December quarter, while there was a pick-up in both reported earnings growth and expectations for the year ahead.

The main factor behind the overall rise in the index was a solid lift in households’ reported earnings growth over the last year. However, the Index warned that this followed some “surprisingly weak readings” in the previous two quarters. Reported earnings growth remains well below its pre-Covid trend, despite the official data pointing to some quite strong growth in household earnings in the last couple of years.

“Our best explanation remains that people are viewing their situation in inflation-adjusted terms – high inflation has meant that even those who have received larger pay rises in recent years still feel that they’re struggling to get ahead,” the Index stated.

Finding and holding a job remains the biggest concern for New Zealanders in the survey. Expectations of job opportunities a year from now were effectively unchanged for the quarter, but they remained negative, at levels more consistent with recession. People’s sense of job security has also weakened, reaching its lowest level since the economy emerged from the Covid lockdown in 2020.

The survey responses were broadly similar across age groups and income levels. Employment confidence rose in seven regions and fell in four. Gisborne/Hawke’s Bay was the most upbeat part of the country.