Improved job sentiment offers some relief for borrowers, but pay growth remains modest.
New Zealand’s labour market is showing early signs of stabilising, but weak wage momentum means borrowing capacity for first-home buyers and property investors is unlikely to improve quickly.
Westpac’s latest Employment Confidence Index, compiled with McDermott Miller, rose 1.8 points to 95.6 in the March quarter, the highest reading since early 2024.
A reading below 100 still signals more pessimists than optimists, but senior economist Michael Gordon said the lift was driven by households’ views on current job prospects rather than a surge in pay expectations.
The results land as the latest Westpac–McDermott Miller Consumer Confidence survey shows overall sentiment slipping, with the confidence index down 1.8 points to 94.7 as war‑driven fuel price spikes cloud the outlook.
Job-finding conditions improve, but outlook cautious
The survey was run from 1–12 March, just as the Iran conflict began to push fuel prices higher.
Gordon cautioned that it is “unclear to what extent this level of confidence will be maintained in the months ahead” as the effects of higher petrol and transport costs flow through.
A net 46% of respondents said it is hard to find a job, the least negative result since December 2024 and broadly consistent with the unemployment rate having peaked at 5.4%.
Westpac noted that hiring intentions in the Quarterly Survey of Business Opinion have turned positive for the first time in two years, while tax data show the number of filled jobs now running slightly above a year ago.
However, households were more wary about job conditions over the next 12 months, with expectations for future job availability slipping back towards recent lows.
Wage growth moderates, limiting purchasing power
Earnings indicators remain subdued. A net 14% of households reported pay rising over the past year, and a net 22% expect increases in the year ahead – both low by historical standards.
Westpac said Stats NZ data point to more wage rises in the 2%–3% range, with far fewer workers receiving 5% or more, reflecting “the degree of slack in the labour market”.
On job security, New Zealanders were “more optimistic about their own job security over the year ahead”, with gains strongest among men, older workers, and middle‑income earners. At the same time, longer spells of unemployment mean those who do lose jobs can find it harder to re‑enter work.
Read the Westpac McDermott Miller Employment Confidence Index report.
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