New Zealanders feel only slightly better about their job prospects than they did in the winter, and the three months to June were the gloomiest the country’s workers have been since the question was first asked in 2004.
The Westpac McDermott Miller Employment Confidence Index, published on Tuesday 22 September, rose 3.2 points to 86.3 in the September quarter. That recovers only a small part of the 12.5 point fall in the June quarter, when the index dropped to 83.1. Westpac says the last two readings are the lowest in the survey’s history.
A reading of 100 would mean optimists and pessimists were evenly balanced. Anything below 100 means more people are downbeat than upbeat. The survey interviewed 1,550 people between 1 and 12 September, and Westpac puts its margin of error at 2.5 percent.
The small lift did not come from people finding work easier to get today. It came from a slightly less gloomy view of next year.
The survey asks whether jobs are plentiful or hard to get, then takes the share saying “plentiful” away from the share saying “hard to get”. In September that net figure was minus 59.8, almost unchanged from minus 59.7 in June. Put simply, the share of people saying jobs are hard to get outnumbers the share saying they are plentiful by almost 60 percentage points. Westpac senior economist Michael Gordon says that is the softest reading since the mid-2010s.
Expectations for a year from now improved more. The net figure for expected job opportunities rose from minus 30.4 to minus 21.6, pulling back from what Westpac describes as a post-GFC low last quarter. Workers’ sense of their own job security also improved, from a net minus 9.6 to minus 6.4.
The weakest part of the survey is pay. A net 12.5 percent of households expect their earnings to rise in the coming year, barely above June’s 12.3 percent, which was the lowest in the survey’s 22 years. A net 6.7 percent said their earnings had risen over the past year, up from 2.8 percent.
Gordon suspects people answer those questions in real terms, asking themselves whether their pay is keeping up with the cost of living rather than whether the number on the payslip is bigger. “The weakness in expected earnings suggests that workers are not confident about being able to extract cost-of-living pay increases in the face of the rise in fuel prices,” he writes in the report. “The existing degree of slack in the labour market means there is less bargaining power for workers.”
That slack shows up in the official figures. Stats NZ reported on 5 August that the unemployment rate rose to 5.6 percent in the June 2026 quarter, up from 5.4 percent in March, and the underutilisation rate, which also counts people who want more hours, reached 13.8 percent. That was about 440,000 people, as we reported at the time. Stats NZ’s labour cost index, which tracks pay rates for the same job done to the same standard, rose 2.0 percent in the year to June. That measures wage-rate inflation, not the change in what individual workers take home.
Westpac’s reading of the data is that people are not losing jobs faster. They are finding it harder to get one. Gordon notes that the Household Labour Force Survey suggests the rate of job losses has stabilised or even improved a little. “Rather, the ongoing rise in unemployment reflects that those who are out of work have been finding it increasingly difficult to get in (or back in),” he writes. He also points to job vacancies still well below pre-Covid levels and a rise in long-term unemployment that he calls unusual for this cycle.
The mood differs a lot by region. Employment confidence rose in eight of the 11 regions. Northland jumped 16.4 points to 90.1 and is now the most confident region in the survey, after being the least confident in June. Taranaki and ManawatΕ«-Whanganui went the other way, falling 10.9 points to 76.9, the lowest of any region, with particularly sharp falls in expected earnings and job security. Auckland sat at 84.8 and Wellington at 83.6, both below the national figure.
Westpac says the South Island as a whole remains slightly more confident than the North, helped by strong export prices that have lifted rural regions over the past year. Northland recorded a sharp rise in unemployment in the June quarter, but Westpac treats that with caution and suspects it was largely survey noise in a small region.
By income, the biggest improvements in perceived job security came from middle and high earners, who had recorded large falls in June. By age, confidence rose among younger and older workers but barely moved for those aged 30 to 49.
The employment survey follows Westpac’s consumer confidence survey, published on Wednesday 16 September from the same interviews. That index rose 9.1 points to 89.5, a bigger bounce, but still well under its 10-year average of 97.2. Senior economist Satish Ranchhod credits lower petrol prices since the peak earlier in the year and strength in export industries, but adds that “households are still being buffeted by some powerful financial headwinds and they remain cautious about their spending.”
Those headwinds include fuel and mortgage rates. The Reserve Bank has lifted the Official Cash Rate twice since July, on 8 July and 2 September, taking it to 2.75 percent, and ANZ now expects it to reach 3.5 percent by March, as we reported last week. Petrol has also started climbing again. The average price of 91 unleaded reached $3.25 a litre on Friday 18 September, according to the fuel app Gaspy, as we reported. That was after both Westpac surveys had finished.
That combination explains why job confidence and consumer confidence have moved differently. Petrol well below its peak earlier in the year gave households some breathing room, which lifted the consumer index. It did not create jobs, and it did not persuade workers they could win pay rises to match prices, so the employment index barely moved.
Westpac still expects things to turn. “We expect that the current 5.6% will mark the peak in the unemployment rate for this cycle,” Gordon writes, pointing out that the unrounded June figure was 5.56 percent, so a small change would be enough for the next reading to round lower. He cites annual GDP growth of 2.6 percent in the year to June, which Westpac says is above estimates of the economy’s potential growth rate. The June quarter itself grew by a more modest 0.2 percent, as Stats NZ reported on 17 September.
For people looking for work, the forecast is a slow improvement rather than a quick one. Employment has been growing, but not fast enough to absorb everyone joining the labour force, and Westpac says fuel prices remain a headwind to growth. The next hard evidence arrives in early November, when Stats NZ publishes its September quarter labour market figures. Before then, Treasury’s Pre-election Economic and Fiscal Update on Tuesday 29 September will set out its own unemployment forecasts ahead of the election.
How does the job market look from where you are? Are you finding work harder to get, or has your pay kept up with your costs this year? Tell us 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 π
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