Labour market stabilises as filled jobs finally tick up
New Zealanders are feeling slightly better about their job prospects, but the labour market remains challenging, according to Westpac McDermott Miller’s latest Employment Confidence Index and fresh jobs data from the Monthly Employment Indicator (MEI).
The Employment Confidence Index rose 3.9 points to 93.8 in the December quarter, its highest level since early 2024 but still below the 100 breakeven mark, indicating more pessimists than optimists.
Michael Gordon (pictured), Westpac NZ senior economist, said the improvement was driven more by expectations than current conditions.
“The lift in confidence was rooted more in hopes for the year ahead, with the expectations index rising by five points while the current conditions index rose only two points,” Gordon said.
“It’s still a tough market for job seekers. Almost two-thirds of respondents in the December quarter survey said that it’s hard to find a job at the moment, while only 8% felt that jobs are readily available,” although this was a “small improvement” on the previous quarter.
On balance, households remain cautious about job opportunities over the next 12 months, but Westpac says this measure is now the least negative it has been since September 2022.
Job security improves as regions diverge
Despite subdued confidence overall, New Zealanders are becoming more upbeat about keeping their current roles.
The lift in perceived job security was strongest among young people and those on low incomes, while women still feel less secure than men, although the gap narrowed in the December quarter. High-income earners saw only a small improvement but remained the most confident group.
Regional results were mixed, with only one region above the 100 mark. The strongest confidence readings were in the north and west of the South Island and in Otago, where unemployment is relatively low, while Wellington slipped to the bottom of the rankings.
This improving sense of job security comes as New Zealand business confidence also rebounds, with the latest NZIER Quarterly Survey of Business Opinion showing a net 39% of firms expect better economic conditions – the strongest reading since early 2014 and signalling an upswing set to strengthen into 2026.
Filled jobs rise as labour market stabilises
Separately, Westpac’s first impressions of Stats NZ’s MEI show signs that the jobs downturn is easing. Filled jobs rose 0.3% in November, the most positive month since April 2023 outside temporary election hiring.
While this figure is likely to be revised lower, Gordon said it “adds to the signs of stabilisation in the jobs market in recent months”, after a sustained decline in employment since early 2024.
Public sector‑dominated areas such as administration, education and healthcare are showing the strongest trends, with some improvement in tourism‑linked industries and agriculture, but ongoing declines in construction and professional services.
Westpac says its employment confidence and MEI readings are consistent with “a modest lift in employment over the December quarter – not strong, but enough to absorb the growth in the labour force, leaving the unemployment rate steady at 5.3%.”
For more insights, read Westpac's First Impressions on the NZ Monthly Employment Indicator and the Westpac McDermott Miller Employment Confidence Index report.
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