Employment confidence declines to lowest level since first Covid lockdown

Employment confidence continues to languish near pandemic era lows as perceptions around job availability deteriorate further.

The Westpac McDermott Miller Employment Confidence Index fell 2.2 points to 89.2 in the September quarter - the lowest reading since the country was coming out of the first Covid lockdown in 2020.

A reading below 100 indicated pessimists outweighed the optimists.

Westpac senior economist Michael Gordon said the biggest driver was households' belief that jobs were becoming much harder to find.

Perceptions around current job opportunities tumbled 14.3 points. The measure was closely watched by economists due to its close correspondence with the unemployment rate over time.

"Job vacancies have been shrinking for some time, and in the last few months we've seen a turn to outright job losses," he said.

Confidence fell in seven out of 11 regions, with Auckland seeing the biggest fall.

"While Wellington remains the most downbeat region, Auckland is now not far behind," Gordon said.

"This is a useful reminder that while public sector cutbacks have been well-publicised, it's the private sector that has borne most of the pain in the jobs market to date."

Gordon said the weaker labour market has followed a prolonged slowdown in the New Zealand economy over the past two years.

"Similarly, households recognise that it will take some time for lower interest rates to work their way through, and for businesses to find themselves back in the position of needing to find more workers," he said.

The survey had a sample size of 1555 and had a margin of error of 2.5 percent.