New Zealanders’ confidence in the labour market has continued to slide

New Zealanders' confidence in the labour market has continued to slide, with the Westpac McDermott Miller Employment Confidence Index dropping to 99.3 in the September quarter. That's the lowest level since main concern for workers continues to be the weakness in earnings growth. Among respondents to the Employment Confidence Survey, the proportion of workers who received a pay increase over the past year has fallen to its lowest level since 2010. And even for those workers who have received wage increases, the extent of these increases has been pretty modest. According to the private sector Labour Cost Index, wage rates only rose by 1.8% in the year to June, which isn't much above the lows reached during the Global Financial Crisis.

Workers aren't expecting things to get much better anytime soon either. In fact, the proportion of respondents expecting a wage increase over the coming year is at its lowest level since the survey began in 2004. This is a particular concern for younger workers (those aged 18 to 29) and those earning less than $30,000 a year.

Workers have continued to highlight low levels of job security, particularly those on lower incomes. In addition, workers have noted increased concern about the current availability of jobs, and that they expect jobs to remain scarce over the coming year. These measures have tended to have a close relationship with the unemployment rate, and suggest that we're unlikely to see a significant improvement in unemployment in the near term.

Employment confidence was down across all age groups. However, it has been particularly weak among older workers. Those workers aged 50 plus have noted very low levels of job security. They have also reported that their earnings growth has been limited.

Employment confidence is highest in those households earning more than $70,000 per year. But even among these households, there is growing concern around job opportunities.