The Westpac McDermott Miller Employment Confidence Index rose to 104.2 in the June 2013 quarter, up from 100.7 in the March 2013 quarter.
"Households’ job optimism continues to improve," said Westpac Senior Economist Felix Delbruck. "The last time the Index was at this level was in September 2011."
"However, the survey doesn’t suggest the labour market is off to the races - a slow uphill climb is a better characterisation. In particular, perceived job opportunities and reported wage growth remain very low by pre-recession standards."
"What’s more, expected wage growth has eased for the second time in a row, perhaps reflecting the wider environment of very low inflation. As such today’s survey won’t make the RBNZ any more inclined to raise interest rates."
"The survey did suggest that the regional divisions in New Zealand’s labour market may be softening," said Mr Delbruck. "Employment confidence slipped a little in Canterbury and Auckland, but rose everywhere else."
The survey was conducted over 1 - 10 June, with a sample size of 1568. An index number over 100 indicates that optimists outnumber pessimists. The margin of error is 2.5% for a 95% confidence interval.
Within the index’s five component series, households’ perceptions of current job opportunities improved for the third time running, with a net 48.6% saying that jobs are hard to get. This is the least downbeat since June 2010, but compares to a pre-2009 average of a net 45.2% saying jobs are easy to get.
Expectations for job opportunities over the coming year have improved significantly, but remain cautious, with pessimists just outnumbering optimists. Respondents’ expectations for their own job security are more positive and rose marginally, to a net 13.9% optimistic.
The net percentage reporting rising earnings rose for the fourth quarter in a row, to 26.1%. This is the highest since December 2011, but still well below the pre-2009 average of 37.4%. The net percentage expecting earnings to rise over the coming year eased for the second quarter in a row, to 29.9%.
"Employment Confidence in New Zealand lifted slightly in the June Quarter of 2013," announced Richard Miller, Managing Director of Strategy Planning Consultancy McDermott Miller.
"The employment confidence of Private Sector employees is again above that of their Public Sector counterparts, and the gap between them has widened," said Richard Miller. "The Employment Confidence Index for Private Sector employees increased from 101.9 in March to 107.6 in June, while that for the Public Sector only edged upward, from 96.2 to 98.0," Richard Miller said.
"The lift for Private Sector employees came from an 11.8 point positive movement in net perceptions of current availability of jobs and a 10.1 point movement in perceptions of improved job opportunities in NZ over the next year. Similar but smaller shifts also occurred among Public Sector employees. Private Sector employees’ responses to questions on earnings and personal job security also moved in a positive direction but, in contrast, Public Sector employees became less positive about their earnings in paid work and expectations for personal job security."
"Employment confidence is reflecting rising consumer confidence among both Private and Public Sector consumers. The consumer confidence of Private Sector employees, as measured by the Westpac: McDermott Miller Consumer Confidence Index rose to 122.3 in June 2013 (up 6.8 points from March) and is also higher than that of their Public Sector counterparts (115.5, up 4 points from March)," Richard Miller observed.
"Clearly, employment factors are influencing consumer confidence," Richard Miller said. "When asked about the reasons for positive household financial expectations, Private Sector employees are more likely to ascribe their positive expectations to salary/wage rises than Public Sector employees (20% v. 18%) and, unsurprisingly, improved profit in their businesses (17% v 1%). On the other hand, Public Sector employees are more likely than Private Sector employees to ascribe positive household financial expectations to a person in their household beginning work (21% v 9%)".
"The upward convergence of consumer and employment confidence point to recovery in consumer spending in the year ahead," suggested Richard Miller.