Westpac McDermott Miller Employment Confidence Survey shows rise, but confidence remains close to its lowest levels since the 2020 Covid lockdown

People remain generally downbeat about job prospects - but there are signs of  improvement in the wind.

The Westpac-McDermott Miller Employment Confidence Index rose in the December quarter, reversing a fall in September.

But it is still low, at 91.1 and close to its lowest levels since the 2020 Covid lockdown. A reading below 100 indicates that more New Zealanders are pessimistic about the state of the labour market than are optimistic.

However, in the December quarter there was an improvement in people’s perceptions about the availability of jobs - for the first time in over two years.

The survey's 'current opportunities measure' lifted from -50 to -44. That's still very soft compared to history, but was an improvement.

Westpac senior economist Michael Gordon said the current opportunities measure has had a close relationship with the unemployment rate over time (aside from a structural break in 2019, as a result of improvements to the confidence survey).

"The latest reading is still consistent with the unemployment rate reaching 5% in the near future, but offers some hope that it may not reach much beyond that," he said.

The official unemployment rate hit 4.8% in the September quarter, with the December quarter figures due to be released by Stats NZ on February 5. 

Gordon said in the Westpac McDermott Miller survey there was also a modest rise in people’s expectations about job opportunities a year from now.

"While this expectations measure doesn’t have a strong correspondence with actual labour market outcomes, nonetheless it shows that people are at least becoming a little more confident that the worst has passed."

He said the employment confidence survey joins a handful of indicators that have pointed to some stabilisation in the jobs market recently, including:

• Stats NZ's Monthly Employment Indicator showed a 0.3% increase in filled jobs in November. "While we suspect this will be revised down a little in subsequent reports, it still marks a change after seven straight months of job losses."

• Job advertisements (only available up to November) appear to have bottomed out in recent months, following a sharp fall between mid-2022 and mid-2024. "That said, there is no evidence yet of a pickup in hiring – the number of ads is at its lowest since 2013."

• Both the ANZ and NZIER business confidence surveys have seen hiring intentions turn net positive again in recent months. "The key issue is when those stated intentions will turn into action – both surveys have shown further job shedding up to now."

Gordon said in the survey confidence rose in seven regions and fell in four. The rise in confidence was more apparent in the main centres, particularly Auckland and Christchurch, which both saw strong gains in perceptions about job availability. 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 Westpac-McDermott Miller Employment Confidence Index summarises responses to five questions: households’ perceptions of current and future job opportunities in New Zealand, their own actual and expected earnings, and expected changes in their own job security. The questions about current job opportunities and earnings are summarised in the Current Employment Conditions Index, while the questions about the year ahead are summarised in the Employment Expectations Index. The survey took place over the period 1-11 December 2024 and had a sample size of 1553.