Employment confidence posts record fall

Confidence held by employees in New Zealand for the year ahead fell to a record low in the December quarter, the Westpac-McDermott Miller employment confidence index shows. A record low value of 104.0 in the December quarter meant that the index fell 17.2 points from the third quarter of 2008. A value above 100 represents more optimists than pessimists in the workforce, with a score under 100 representing the opposite. The latest figures show that employment confidence for 2009 has diminished amid the worst global financial crisis since the 1930's. Westpac is forecasting  unemployment to reach 5.6% in the 2009 calendar year, and ANZ is forecasting 6.2% in the December quarter of 2009. "Employees have finally succumbed to the negativity that has pervaded the New Zealand economy over the past year," Westpac economist Brendan O'Donovan said. "Sure, at current levels the number of optimists still outweighs the number of pessimists, but only by a whisker. Moreover, in the four and a half year history of the survey, the index has averaged a solid 128.2, and has never been lower than 120.8 (June 2008 quarter)," O'Donovan said. A net 26% believed that jobs were hard to get. This was a complete reverse from the September survey, in which a net 25% believed jobs were easy to get. There was a rise in the amount of respondents thinking that jobs would be harder to find in a years time, from net 10.3% in September to net 31.2% in December. "Admittedly, the news over the past few months has been particularly damning for the labour market, with redundancy announcements becoming almost commonplace in local newspapers, along with news stories of small to medium sized firms that are reviewing their staffing levels. We have little doubt that these stories will have weighed heavily on respondents' minds this quarter," O'Donovan said. The October 2008 tax cuts had a positive impact on the employment index, with a net 38% of respondents saying their take home pay was better than in the December quarter of 2007, up from a net 33% in the September 2008 survey. A net 37% of respondents believed that their take home pay would be better in a year's time, although this was down from a net 46% in the September Survey. Also recording a fall was job security, which fell to its lowest level since the survey began in 2004. A net 1.8% responded that they believed their job would be secure over the next year, down from a net 12.2% in September.