Job confidence strong in South
Optimism slips elsewhere
EMPLOYMENT confidence remains strong in the South Island although New Zealand workers in general have become a bit less optimistic about the state of the labour market.
Nationally, the Westpac McDermott Miller Employment Confidence Index fell to a level of 109.9 in March, down from 112.7 in December.
Nelson/Marlborough/ Westland was the only South Island region to show a significant fall, down 5.6 points to 111.1 in March, still ahead of the national average.
Canterbury rose 10.1 points to 118, Otago was up
5.2 to 109.8 and Southland was down 0.4 points to
111.3 from 111.7 in December.
In the North Island, only Northland and Bay of Plenty recorded rises in confidence. Auckland, Waikato, Gisborne/ Hawkes Bay, Taranaki/ ManawatuWanganui and Wellington were all down in confidence from December.
McDermott Miller spokesman Richard Miller said although employment optimism generally prevailed, a North/South Island split emerged in March.
In the North Island, the confidence index dropped 5.5 points to 108.4. In the South Island, employees became more confident — the index rising 5.4 points to 114.6.
That was a reversal of past trends and could reflect contrasting attitudes towards the drought lifting in the South Island and a deluge falling in the North, he said.
Westpac acting chief economist Michael Gordon said workers reported they were feeling less confident about their job security.
They weare also less optimistic about prospects of finding a new job than they were at the end of 2016.
‘‘These results don’t suggest a material weakening in the labour market. March’s pullback follows some solid gains in late 2016 and confidence in the labour market is still well up on the lows it reached this time last year.’’
Conditions in the labour market continued to look healthy, he said.
More workers reported their earnings had been rising over the past year. With the economy now in its seventh year of continued growth and demand conditions remaining positive, Mr Gordon expected the situation to continue during the remainder of the year.
One of the key reasons for low wage inflation in recent years was the low level of consumer price inflation. That meant the cost of living adjustments to wage levels had also been low. But when adjusted for purchasing power, earnings growth had actually been ‘‘pretty healthy’’.
However, consumer price inflation had now lifted and was expected to ‘‘tick along’’ at levels of about 1.6% to 2% in 2017 and 2018 — up from rates below 1% for most of the past two years, he said.
‘‘If this isn’t matched by an increase in wage growth, many households may find their purchasing power being eroded.’’