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Employees upbeat about labour market

NZ Newswire logoNZ Newswire 19/01/2017 Paul McBeth

New Zealand employment confidence has risen to its highest level in eight years as Kiwis grow more upbeat about the prospect of wage increases and less pessimistic about job opportunities.

The Westpac-McDermott Miller Employment Confidence Index rose 2.6 points to 112.7 in the December quarter, adding to an 8.5 point increase in September and taking the measure to its highest level since 2009.

A reading above 100 indicates optimists outnumber pessimists. The present conditions index advanced 5.5 points to 112.3 and the future conditions index edged up 0.7 points to 112.9.

"Increases in employment confidence have been broad-based," Westpac acting chief economist Michael Gordon said in a statement.

"The largest gains have been seen in the regions, with the improved outlook for the dairy sector a likely factor that has supported confidence in the labour market and economy more generally."

New Zealand's economy is expected to continue expanding at a decent clip in 2017 as the recovery in global dairy prices adds a third leg to the nation's growth, which was propelled by a major construction pipeline and unprecedented tourism levels.

An expanding population has been soaked up by that economic growth with new jobs created to absorb more people, though that's kept wages relatively stagnant over the past two years. However, with rising oil prices and a disrupted supply chain set to inject inflationary pressures and the building sector still struggling to find labour, wages are also expected to start rising.

Mr Gordon said workers were still concerned about wage growth and as consumer prices start rising that could erode households' purchasing power.

Employees grew less pessimistic about the jobs market, which employers have been saying it becoming increasingly competitive. A net 5.1 per cent said it was hard to get a job in the quarter, compared to a net 12.4 per cent in September.

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