Top of south bucks employment confidence trends
The top of the south is one of only two regions where employment confidence has improved over the last three months, according to a bank survey.
Nelson/Marlborough/West Coast bucked the national trend which saw the Westpac McDermott Miller Employment Confidence Index fall to levels last seen near the end of the 2008-09 recession.
The national index fell to 96.2 points in the June quarter, down from 98.9 in the March quarter, but it improved from 97.5 to 100.8 for Nelson/Marlborough/West Coast. Readings below 100 mean pessimists outnumber optimists.
Nationally, the index is now 9.9 points below its peak optimism of 106.1 in June 2011, and the third most pessimistic level since the beginning of the series in June 2004. Gloom among gov- ernment workers about their own job security helped push the index to its fourth straight quarterly decline, with the public sector part of the index sinking 3.8 points to 89.7, its lowest ever level.
It comes as the Government tries to keep a lid on new spending in an effort to return to budget surplus by 2015.
By contrast, private sector employees remain optimistic, even with a 1.1 point drop to 100.5.
‘‘Households have been downbeat about employment conditions in the wider economy for several years, but we’re now increasingly seeing their expectations for their own job security and earnings erode as well,’’ Westpac chief economist Dominick Stephens said.
The survey showed that a growing economy was not yet translating into an improving labour market.
Unemployment edged back up in the March quarter, to 6.7 per cent and the survey suggested that it had stayed high over the past three months. The number of households reporting and expecting wage increases has fallen off significantly, the survey showed.
‘‘On today’s evidence we’re also still a way off from seeing a significant increase in wage pressures,’’ Stephens said.
The survey was conducted between June 1 and June 10, with a sample size of 1570.
Meanwhile, the top of the south is faring better than many other regions in Westpac’s two other confidence in- dexes, although both are trending downwards.
Economic confidence in Nelson/ Marlborough/West Coast for the June quarter held up reasonably well, edging down to a net 4 per cent of households expecting good times for the region over the next year. This compared with a national average of –4 per cent. The bank said there were signs the region was benefiting from both migrants and work as a result of the Canterbury earthquakes, which was boosting the local housing market and business sector.
However, consumer confidence in the region slumped 6.8 points to 99.4 in the June quarter, a touch below the national average of 99.9.
Nelson Tasman Chamber of Commerce chief executive Dot Kettle said the survey findings backed up indications that business confidence had improved, although it was tenta- tive and still vulnerable to setbacks.
‘‘In our conversations with business owners they are starting to feel things are picking up a little bit.’’
There was renewed confidence among the construction cluster about opportunities arising from the Christchurch rebuild and DB Breweries’ move to buy a majority stake in Redwood Cellars underlined the region’s export strength, she said. If NZ King Salmon was successful in its application to increase the number of marine farms in the Marlborough Sounds it would boost confidence further.
Much of the growth was coming from companies reorganising themselves to improve productivity rather than winning big new contracts or finding new export markets, Kettle said. As usual, local consumer spending was likely to remain tight over winter, although she hoped it would be better than last year for retailers.