Westpac McDermott Miller Employment Confidence Survey shows lowest levels of confidence since the immediate aftermath of the first Covid lockdown in 2020

Confidence in the jobs market has fallen again after a slight pick-up prior to Christmas.

The quarterly Westpac-McDermott Miller Employment Confidence Index fell by 3.3 points to 88.3 in the March quarter. This is the lowest reading for the Index since September 2020, in the wake of the first Covid-19 lockdown. An index number under 100 indicates that those pessimistic about the job market outnumber the optimists. 

"Perceptions about the availability of jobs were down across most regions," said Westpac senior economist Michael Gordon.

"This measure had picked up a little in the December quarter, but has since given back those gains."

Gordon said while job availability remains "soft", this measure is still broadly in line with the current unemployment rate of 5.1%.

"This supports our view that the rate of unemployment rate is nearing its peak for this cycle."

The Reserve Bank (RBNZ), in its February Monetary Policy Statement, forecast that unemployment would peak at 5.2% in the March quarter that's nearly finished now. However, the RBNZ sees unemployment falling only slowly from there, going down to 4.9% by the end of this year and 4.5% by the end of 2026.

Business confidence surveys have seen a lift in stated hiring intentions, but there’s little sign of this translating into more job advertisements yet, Gordon said.

"Indeed, some businesses have indicated that they held on to staff as the economy cooled, having previously been stung by the difficulty of finding workers through the 2021-2022 boom. As a result, many of them now find themselves overstaffed and are not immediately looking to hire even as demand picks up."

Gordon said that the survey results for the March quarter differed "substantially" across the country, with only four out of eleven regions recording a fall in confidence - but one of those was Auckland - "which dominated the national average".

He said much of the difference across regions was driven by earnings growth, which was generally weaker in the main centres but rose strongly in some of the more farming-intensive regions.

"A record high farmgate milk price for this season, and improving export prices for beef and lamb, are providing a boost to incomes in these regions."

McDermott Miller market research director Imogen Rendall said job confidence remained subdued in both the public and private sectors.

"For employees in the private sector, confidence has dropped 4.7 points down to 87.9 (a drop of 20.8 points from this time last year) and for those working in the public sector, confidence has picked up slightly by 1.4 points rising to 89.2 (but still down 16.5 points from a year ago)."

Both private and public sector employees have taken "a particularly pessimistic" view on the current availability of jobs, with around six in10 saying jobs are currently hard to get, Rendall said.

The survey was conducted over 1-12 March 2025, with a sample size of 1,550. The margin of error of the survey is 2.5%.