The Westpac McDermott Miller Employment Confidence Index fell 13 points to 91.4 in the June quarter. Photo: 123rf
Employment confidence has fallen sharply as employees see reduced job prospects and a likely rise in unemployment.
The Westpac McDermott Miller Employment Confidence Index fell 13 points to 91.4 in the June quarter survey, showing a drop back into pessimism, to the lowest level since the first Covid-lockdown in 2020.
Jobs were seen as increasingly hard to come by, which Westpac said signalled a further rise in the unemployment rate in the months ahead.
Perceptions about pay growth and job security also fell.
The biggest decline across the survey's various measures was in households' perceptions of current job opportunities, falling 24 points.
"This measure is of particular interest to us as it has had a close correspondence with the unemployment rate over time," Westpac senior economist Michael Gordon said.
Gordon said a rise in unemployment was expected due to the high interest rates imposed by the Reserve Bank to tame high inflation.
The latest data from Stats NZ showed the unemployment rate at 4.3 percent in the March quarter, rising from the historic lows seen between 2021 and 2023.
"We haven't seen a significant rise in layoffs to date, perhaps due to employers looking to hold on to workers. But that may change as the economy's slowdown progresses," he said.
McDermott Miller market research director Imogen Rendall said confidence had fallen amongst employees in both the public and private sectors.
"Both private and public sector employees have taken a particularly pessimistic view on the current availability of jobs, together with future job opportunities in a year's time," Rendall said.
"Private sector employees are also indicating a real concern regarding their future job security. It will be interesting to see how this plays out over the months to come," she said.