Two-thirds say finding a job is getting harder
Confidence in New Zealand’s labour market remains low despite a slight uptick in the September quarter, according to the latest Westpac-McDermott Miller Employment Confidence Index.
The index rose 1.1 points to 89.9, remaining effectively flat over the past year and close to post-COVID lows. Any reading below 100 signals more pessimists than optimists.
“Confidence about the state of the labour market remains low,” said Westpac senior economist Satish Ranchhod (pictured). “A perceived lack of job opportunities and low job security continue to be key concerns for New Zealanders.”
Job seekers face tough conditions
Around two-thirds of respondents said it is currently hard to find a job – the weakest result since 2020. Ranchhod said this is a leading indicator of unemployment, reinforcing forecasts that the rate will climb to around 5.3% later this year.
Employment levels have already fallen 0.9% over the past 12 months. While job ads have begun to pick up, they remain very low, underlining the soft labour market.
The weak employment confidence follows a 0.9% GDP contraction – far deeper than the 0.3–0.4% fall expected. The result has banks tipping larger OCR cuts, which could ease mortgage rates but also signals ongoing risks of disruption and job losses.
Job security concerns rising
Concerns about job security are elevated across all age groups, with 24% of people expecting their job to become less secure in the year ahead, compared to just 20% who expect more security.
Women, younger workers under 30, and those over 50 reported the lowest levels of confidence.
Ranchhod noted that cyclical sectors such as retail and hospitality have seen the sharpest job losses in recent months, which explains much of the nervousness.
Earnings expectations lift slightly
Despite the weak backdrop, there was a modest rise in wage expectations. Ten percent of workers reported their earnings increased over the past year, up from 3% in the previous survey.
Looking forward, expectations of pay rises over the next 12 months have reached their highest level since early 2024.
Stats NZ’s Labour Cost Index shows wage increases are moderating, with more workers receiving 3–5% rises rather than 5% or more, reflecting reduced bargaining power as inflation has eased back inside the RBNZ’s 1–3% target band.
Regional differences
Confidence remains weakest in Northland, Wellington and parts of the lower North Island, where job opportunities and earnings growth are limited. In contrast, dairy-exporting regions such as Southland, Otago, and Waikato reported stronger sentiment, supported by firm commodity prices.
Fragile jobs market offsets mortgage relief prospects
For mortgage advisers, the survey underscores a fragile labour market where job security concerns and soft wage growth are weighing on confidence. But with GDP weakness increasing the odds of larger OCR cuts, falling mortgage rates could improve serviceability for clients even as employment risks persist.
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