Confidence among New Zealand workers has fallen to the lowest level recorded in more than two decades, as the fuel shock and the conflict in the Middle East rattled households just as the labour market was starting to look fragile.
The Westpac McDermott Miller Employment Confidence Index dropped 12.5 points to 83.1 in the June quarter, the weakest reading since the survey began in September 2004, according to figures reported by interest.co.nz. A reading below 100 means pessimists outnumber optimists, so the new low points to a workforce that has turned sharply gloomy about its job prospects and pay.
The fall was broad. Confidence dropped across almost every region, age group and income band surveyed, which suggests the mood is not confined to one struggling corner of the economy but has spread right through it. The survey of 1,550 households was carried out between 1 and 12 June, a window that captured the worst of the fear over oil prices and petrol costs in the days after the strikes on Iran.
The detail behind the headline number is the part that should worry employers and the government. A net 60 per cent of people said it was hard to find a job at the moment, up from a net 46 per cent in the March survey. Looking a year ahead, a net 30 per cent expect fewer job opportunities, a level close to the lows seen during the global financial crisis in 2008. Perceived job security slipped to its weakest point since the Covid lockdowns, with young workers reporting the sharpest drop after several quarters of improvement.
Pay expectations have collapsed alongside the jobs picture. Only a net 3 per cent of households said their earnings had risen over the past year, down from a net 14 per cent in March. Worse, just a net 12 per cent expect their pay to rise in the year ahead, the lowest figure in the entire 22-year history of the survey. When workers stop expecting pay rises, they tend to pull back on spending, which feeds straight into the wider economy that retailers and small businesses depend on.
Westpac senior economist Michael Gordon said the result lined up with the bank’s own forecasts for a softer jobs market in the months ahead. “The latest reading is consistent with our forecast of renewed softness in the jobs market” in coming months, Gordon said, as reported by interest.co.nz. The bank expects the unemployment rate to climb to a peak of about 5.6 per cent by the end of the year, with economic growth held to around 1.4 per cent across 2026.
There is an important caveat in the timing. Gordon noted the survey was run in early June, before the United States and Iran agreed a ceasefire and before the largest of the recent falls in fuel prices. In other words, the numbers captured what he described as the peak of anxiety rather than where sentiment may have settled since. That leaves open the possibility that the July and September readings recover some ground if petrol prices keep easing and the international picture stays calm.
The regional pattern tracked the parts of the country most exposed to the squeeze. The biggest falls in confidence came in Auckland, Waikato and the Gisborne and Hawke’s Bay area. Holding up better were Taranaki and the Manawatu and Whanganui region, along with the top and west of the South Island, where Nelson, Marlborough and the West Coast proved more resilient.
The figures land on top of a run of weak signals for the economy. The same week, the New Zealand Institute of Economic Research warned that the fuel crisis had knocked the recovery off course, and the New Zealand dollar slid to a two-month low as the fuel squeeze bit. Together they paint a picture of an economy that had been clawing its way back only to be knocked off balance by an external shock it could do nothing about.
The sour mood also has consequences for borrowers and the banks that lend to them. Mortgage advisers expect households to turn more cautious, favouring shorter fixed terms and conservative loan sizes rather than stretching themselves, according to NZ Adviser. When people fear for their jobs and doubt a pay rise is coming, they are far less willing to take on big new debts, which slows the housing market and the spending that flows from it.
For the government, heading into a November election, the survey is an uncomfortable reminder that the recovery many had hoped for still feels distant to ordinary workers. A record low in how secure people feel about their jobs is the kind of number that shapes how voters judge the people in charge, regardless of who is to blame for a war on the other side of the world.
What do you make of the mood among New Zealand workers right now? Have you noticed it getting harder to find work or harder to win a pay rise? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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