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DECEMBER 2011

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Westpac : McDermott Miller NZ Employment Confidence Survey

“Employment Confidence in New Zealand fell sharply in the December quarter”, announced Richard Miller, Managing Director of Strategy Planning Consultancy McDermott Miller. “The Westpac: McDermott Miller Employment Confidence Index for New Zealand in December 2011 stands at 99.6, down 4.7 points from September 2011. The latest result is the most pessimistic since mid-2009”, he observed.

“While New Zealand employment confidence is pessimistic there are contrasts between groups,” stated Richard Miller.

“Public sector employees are the most pessimistic (the Public Sector Employment Confidence Index fell 8.7 points to 95.9 in December”, he observed. “Realisation employment opportunities will be restricted in future, anxiety over job security and lower expectations of earnings, underlie public sector employees’ pessimism”, he said. “In contrast, private sector employees remain optimistic at 103.1 but down 2.1 points from September.”

“Employment confidence fell 4.9 points in metropolitan areas and they are now slightly pessimistic (Metropolitan Employment Confidence Index 99.5),” Richard Miller noted. “Confidence appears to be holding up due to the large number of relatively optimistic private sector employees in metropolitan areas, particularly Auckland,” conjectured Richard Miller.

“The situation is quite different in the secondary centres where Employment Confidence fell sharply (-4.9 points) to a pessimistic 96.7 Index rating,” said Richard Miller. “The confidence of Employees in Provincial areas also fell sharply in December (-6.4 points), but remains nominally optimistic at 100.8 on the Employment Confidence Index”. “The underlying reasons for the fall in confidence among secondary and provincial employees appear to be anxiety over contracting industries, national economic conditions and bleak farming outlook,” suggested Richard Miller.

Index Background

The Index is based on a survey of a representative sample of 1567 New Zealand households interviewed during 1-11 December 2011. It is made up of five component questions: (1) whether people feel that jobs are plentiful or hard to get now; (2) what job opportunities will be like in a year's time; (3) whether they are earning more or less now compared to a year ago; (4) what their earnings will be like in a year's time; and (5) how secure they feel in their present job. Questions 1 to 5 are used in the Employment Confidence Index, while questions 1 and 3 are used to calculate a Current Employment Conditions Index and questions 2, 4 and 5 are used to calculate an Employment Expectations Index.

The Index is intended to provide an indication of the level of job security amongst NZ workers and their wage expectations, and hence an insight into their willingness to spend. Over time, it is possible the Index may become a leading indicator for employment growth.

For further information contact:

Richard Miller
Managing Director
McDermott Miller
+64 (04) 471 8500
+64 (027) 451 0158

Email: strategies@mcdermottmiller.co.nz

Website: www.mcdermottmiller.co.nz

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