Employees more hopeful of job market

Confidence in the labour market rose in the last quarter of 2020, as employees hoped for better in 2021.

The Westpac McDermott Miller employment confidence index rose to 97.6 in December, a 10.2 point increase compared with the September survey. A number over 100 indicates that optimists outnumber pessimists.

‘‘New Zealanders’ confidence about labour market conditions has improved, although it remains below pre-Covid levels,’’ Westpac chief economist Dominick Stephens said.

Most of the improvement in confidence related to job opportunities and job security, he said. As Covid-19 restrictions were lifted, activity was able to quickly return towards previous levels, and firms were ready to hire again. The exception was the tourism sector, due to the closure of international borders.

Westpac said that while job opportunities were improving, earnings growth remained soft. Respondents reported a sharp drop in past earnings since June and there was only a small pickup in December.

‘‘Expected earnings growth over the year ahead rose but it remains near its historic lows.’’

Confidence among employees in the private sector rose significantly since September but remained pessimistic at 96.6, up

12.9 points.

Public sector employees were cautiously optimistic at 100.3, up

4.3 points. There was also slightly less confidence among young people (18 to 29 years), where sentiment fell 3.2 points to 95.

‘‘With young people more heavily reliant on jobs in the hospitality and tourism sector, it seems likely that their confidence will remain suppressed for some months to come,’’ Imogen Rendall, McDermott Miller’s market research director, said. Older workers in the 30-49 years age group were the most confident at

100.3, up 14.3 points, while those

50-plus rose 14.5 points to 92.9.