'People are taking heed of the growing warnings about a recession this year'
Employment confidence in New Zealand declined in the December quarter, as employees grow concerned about job opportunities.
The Westpac McDermott Miller Employment Confidence Index (ECI) fell to 108.0 in the December quarter, down from the post-COVID-high of 115.2 recorded in September 2022.
The decline is attributed to a drop in optimism among over 1,000 respondents, according to the report.
"Confidence amongst both public sector and private sector employees has reduced this quarter, with all concerned about future job opportunities in New Zealand, together with personal job security," said Imogen Rendall, market research director at McDermott Miller.
The confidence drop was more observed among public sector workers, which went down by 10.4 points to 114.0. For private sector workers, there was an overall drop of 5.5 points to 104.6.
Expectations about job opportunities in the year declined by 15.5 points, marking the biggest contribution to the fall in the overall index, according to the report.
"That suggests that people are taking heed of the growing warnings about a recession this year.”
The drop in job expectations come as job ads declined over recent months, according to recent SEEK NZ data.
"It's possible that the rate of decline has been overstated – with our international borders reopening, employers are once again able to fill some positions by bringing in migrant workers rather than having to advertise locally," said the McDermott Miller report.
The findings come ahead of an expected recession across many economies across the world.
"Taking the heat out of the labour market is key to the Reserve Bank's efforts to bring inflation pressures under control," Gordon said. "With that in mind, employment confidence will be one of the more important indicators of whether monetary policy is having its desired effects in the year ahead."
