Job confidence dips in Wellington

JOSH MARTIN
Last updated 05:00 01/10/2013

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The latest employment confidence survey tells a tale of two cities - a struggling Wellington and a somewhat buoyant Christchurch.

Canterbury regained the top spot from Waikato in the quarterly Westpac McDermott Miller Employment Confidence Index, gaining 2.6 index points to 113.1.

Westpac senior economist Michael Gordon put that continued confidence in Canterbury down to the ongoing Christchurch rebuild.

"This is a $40 billion rebuild, that 20 per cent of GDP [gross domestic product] all concentrated in one region, so we would expect a lot more opportunities and upward pressure on wages," said Gordon.

The countrywide index fell to 102.8 in the September quarter, down from 104.2 in the June quarter and the first dip after five strong quarters.

"That's still the second-highest reading in the last two years," said the bank's chief economist, Dominick Stephens.

"But it underscores the slow and halting pace of improvement in the jobs market since the recession ended."

The survey identified Wellington as the most pessimistic about employment and salary growth, which Gordon put down to ongoing fiscal restraint.

Wellington dropped to 96.3 points , down 3.8 points from the June quarter, indicating that pessimistic responses outnumber positive ones.

In December 2007, on the eve of the recession, Wellington was the most optimistic region in the country.

"It's not surprising, given the austerity in the public sector since then and that's coming through in the numbers," he said.

McDermott Miller forecasting director John McDougall agreed the Wellington numbers would have been affected by cuts in the public sector.

However, he also said that the Wellington private sector was more pessimistic than the private sector respondents from the Christchurch or Auckland regions, indicating to him that the gloomy outlook affected private sector workers as much as civil servants, in the capital.

"Of the five questions that underlie the Employment Confidence Index, public sector employees have the more negative net responses on four," McDougall said. "These are perceptions of current job opportunities in New Zealand, 11.8 points lower than private sector employees, expected job opportunities in New Zealand,14.8 points lower, expectations of personal earnings, 2.7 points lower, and job security, 10.9 points lower.

"Only on perceptions of personal earnings over the past year are public sector employees more positive than private sector employees, by 3.1 points," said McDougall.

"The private sector group expects its prospects to improve as the economy recovers, but the public sector group knows the Government's squeeze on their sector will continue."

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The Public Service Association (PSA) said the survey results were not surprising given the ongoing restructuring of the sector.

In Wellington 700 public sector jobs disappeared throughout 2012 and the PSA said more will go.

"Restructuring is accelerating, so there is no sign of any let-up," said a spokesman.

"Members report frequently that staff across the public sector are demoralised with workload issues, constant insecurity and change. Simply put, workers in the public sector are under immense pressure to do more with less," he said.

The survey was conducted from September 1-11, with a sample size of 1571. An index number over 100 indicates that optimists outnumber pessimists.

The margin of error is 2.5 per cent.

- BusinessDay

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