Michael Gordon: Westpac senior economist on the declining confidence in the labour market

Confidence in the labour market is shrinking, according to new reports.

The Westpac-McDermott Miller index shows employment confidence has reached its lowest level since mid-Covid - in September 2020.

It fell in 4 out of 11 regions - including the biggest jobs market - Auckland.

Westpac senior economist, Michael Gordon, says businesses are advertising fewer jobs.

He explained some are just looking for more specialist roles and others are overstaffed after keeping workers through the downturn.

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Episode Transcript

Speaker 1 (00:00):
People around the country feeling pretty pessimistic about their chances
of getting a job. The west Pac McDermot Miller Employment
Confidence Index, which is where you go out and ask
people how are you feeling about your job prospects, it's
dropped to eighty eight point three. That is the lowest
level since September twenty twenty, which was after the lockdowns,
So that's not a great stat Michael Gordon's Westpac senior

(00:21):
Econosty's with me now, Hi, Michael good Anoon. Well, things
looking so why a people feeling so grim?

Speaker 2 (00:28):
Well? I think it's the reality of jobs are still
pretty hard to come by. We hear from certainly from
businesses that while they're some of them are having trouble
filling more specialist roles, but they're tending to find that
there's generally a lot of people available, and some of
them also finding themselves a bit overstaffed having held on
to people through the downturn. So there's just not a

(00:50):
lot being advertised at the moment, and that's really been
the biggest driver of that perception that things are pretty
tough in the jobs market at the moment.

Speaker 1 (00:59):
Depends where you live, though, doesn't it I mean, you
look at some of the regions and actually things are
looking quite good.

Speaker 2 (01:07):
It varies a bit, I think, probably more so in
terms of earnings and the job opportunities. Is what's coming
through in our survey. Whither I will obviously the exceptions.
I think there's been stories about quite a bit of
activity around recent and parts of the West Coast as well,
but generally were sort of found that there's sort of
a bit more variation in. It's sort of more the

(01:30):
farming areas where they're seeing some pretty decent gains from
high dairy and beef prices. Is not necessarily flowing out
into spending in the wider regions yet, but certainly those
more directly linked to it are finding things a bit
better than those of us in the cities.

Speaker 1 (01:47):
Michael, When is it going to get worse? When does
it end? And and you know, when does the confidence return?

Speaker 2 (01:55):
The labor market tends to be one of the slower
things to turn with the cycle. So even if you
consider those GDP figures we had last week, so we've
got some growth out of it, it's probably the underlying
picture is it's not really out stripping population growth at
the moment, so it'll take a bit more than what

(02:15):
we've seen to date to sort of really actually be
able to start to generate some jobs. And as a
result of that, we're expecting the unemployment rate is probably
going to go a bit higher this year before it peaks.
We're not talking, you know, really high peaks compared to
what we've seen in some past cycles, but you know,
undoubtedly it's you know, it's quite a bit different from
where we were a couple of years ago when there

(02:36):
was very you know, we're all very low rates of unemployment.

Speaker 1 (02:39):
All right, Michael, thanks so much for your analysis. Michael Gordon,
Westpac Senior Economist. For more from Heather Duplessy Alan Drive,
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