Confidence building on "tough" job market

By JAMES WEIR – The Dominion Post

Workers think there will be more jobs around in a year, and that they will be making more money, according to a bank survey.

But for now, times are still “extremely tough” on the job front, with unemployment expected to keep rising to about 7 per cent in the middle of next year. Wage rises are slowing down fast.

Workers are feeling much more secure about their jobs and confidence about the labour market is improving, according to the Westpac McDermott Miller Employment Confidence survey. As job security improved, that would eventually translate to a greater willingness to spend, and a greater mood to demand higher wages, Westpac senior economist Donna Purdue said.

The bank survey’s overall employee confidence index rose 6.9 points between the June and September quarters to reach 103. It was the second biggest quarterly gain since the survey began in June 2004.

An index above 100 indicates there are more optimists than pessimists, while a number below 100 indicates that pessimists outnumber optimists. The survey was carried out in the first half of September. The survey showed the number of workers being paid more than a year ago had fallen.

A net 15 per cent of those surveyed said they were better off than a year ago, down from a net 19 per cent in June. More people said jobs were hard to get, at a net 66.5 per cent in September, from a net 65.3 per cent in June.

Both of those indicators were the lowest since the survey started five years ago, indicating that many people were getting little or no wage rise.

Sales of big ticket products such as cars and furniture were hit the hardest in a time of low job security, so as security improved there should be a lift in sales. The survey result suggested that the worst was over for the jobs downturn.