Unemployment still expected to rise above five per cent this year
Employment confidence in New Zealand rebounded in the December quarter as perceptions over job availability improved, according to the latest data from Westpac McDermott Miller.
Its Employment Confidence Index revealed a 2.4-point increase to 91.6 in the December quarter of 2024.
"The main change for this quarter was an improvement in people's perceptions about the availability of jobs," said Michael Gordon, Senior Economist at Westpac, in a statement. "While this measure is still very soft compared to history, it was the first improvement that we've seen in over two years."
Employment confidence among private sector employees went up to 92.6, an increase of 4.4 points from September 2024.
On the other hand, confidence in the public sector declined to 87.8, a decrease of 6.8 points from the previous quarter, according to the data.
"While both public and private sector employees expressed a similar outlook around the availability of jobs, those working in the public sector are taking a considerably more pessimistic view of their current and future earnings prospects compared with those in the private sector," said Imogen Rendall, Market Research Director of McDermott Miller Limited, in a statement.
The dip comes as New Zealand's public sector employers carried out job cuts throughout 2024, including the Ministry of Education, Ministry for Children, Ministry of Environment, among others.
Meanwhile, employment confidence also went up in seven regions, particularly in Auckland and Christchurch, according to the report.
"Wellington was more subdued, recording only small gains across most measures. Nelson and the West Coast also saw a strong lift in confidence, though this was driven by earnings growth rather than job availability," the report read.
Gordon said the Employment Confidence Index joins a handful of indicators that suggest the jobs market is starting to stabilise.
"Lower interest rates are helping to boost confidence across some parts of the economy, though it takes time for them to have their full effect on demand and ultimately on hiring," he said.
His remarks aligned with the recent findings of the New Zealand Institute of Economic Research that showed employers are still cautious in hiring despite greater business confidence.
"We still expect the unemployment rate to rise above five per cent in the months ahead, but there's growing reason to believe that it may not go much beyond that," Gordon said.
New Zealand's unemployment rate is at 4.8% as of the September quarter of 2024, a new high in nearly four years.