Employment Confidence Falls Further, With No Relief From Lower Interest Rates Yet

Westpac-McDermott Miller Employment Confidence, September quarter 2024

The Westpac-McDermott Miller Employment Confidence Index fell by 2.2 points from 91.4 to 89.2 in the September quarter. This was the lowest reading since the country was emerging from the first Covid-19 lockdown in 2020.

“The biggest driver of the weakness in confidence has been the perception that jobs are becoming much harder to find,” said Michael Gordon, Senior Economist at Westpac. “Job vacancies have been shrinking for some time, and in the last few months we’ve seen a turn to outright job losses.”

Mr Gordon noted that the softening jobs market follows a prolonged slowdown in the New Zealand economy over the last two years. “Similarly, households recognise that it will take some time for lower interest rates to work their way through, and for businesses to find themselves back in the position of needing to find more workers,” he said.

Employment confidence fell in 7 out of 11 regions, with Auckland recording the biggest fall this quarter. “While Wellington remains the most downbeat region, Auckland is now not far behind,” noted Mr Gordon. “This is a useful reminder that while public sector cutbacks have been well-publicised, it’s the private sector that has borne most of the pain in the jobs market to date.”

The survey was conducted over 1-11 September 2024, with a sample size of 1,555. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

Acknowledgement

The Westpac-McDermott Miller Employment Confidence Index is owned by McDermott Miller Limited.

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