New Zealanders have become more confident about the labour market and confident they'll be able to earn more in a growing economy.
The Westpac McDermott Miller Employment Confidence Index rose to 108.5 in the March quarter from 106.5 three months earlier. The latest survey shows Kiwis are feeling better about their own job security. Those expecting earnings growth rose to 32.9 percent from 29.2 percent.
While the jobless rate rose to 5.7 percent in the fourth quarter, a record number of people entered the workforce in the final three months of 2014, and employment rose 1.2 percent, figures last month showed. Labour costs rose a more modest 0.5 percent in the fourth quarter but the Westpac survey released today suggests wage pressures may start to emerge, stoking an inflation rate the Reserve Bank expects to stay below the mid-point of its target band for the next three years.
"Despite softness in consumer price inflation, expectations for earnings growth have remained resilient," said Satish Ranchhod, senior economist at Westpac Banking Corp. "This will allay some of the RBNZ's concerns about a downshift in wage and pricing setting behaviour."
Within the survey, the present conditions index was little changed at 102.9 from 102.2, while the employment expectations index improved to 112.3 from 109.4. However, confidence about current job opportunities remained negative at -25.5 from -25.3, as did expected job opportunities at -9.1 from -9.4. Own job security rose to 13.3 from 8.5.
Employment confidence rose in eight of the 11 regions measured, with Canterbury remaining most upbeat at 116.7 from 114.4, while Southland showed the biggest gain, to 115.8 from 100.7. Auckland ranked third at 110.9 from 109.1, followed by Waikato, up to 107.2 from 101.8. Confidence fell in Wellington to 105.4 from 109.6.