New Zealanders are at their most confident about their employment situation, which bodes well for continued positive spending growth.  The Westpac McDermott Miller Employment Confidence Index (ECI) came in at 135.9 in the September quarter 2007, the highest reading since the series began in June 2004.  An index above 100 indicates more optimists than pessimists.

The ECI was up 7.5 points in the September quarter 2007.  The biggest improvement in confidence was from the expectations index, with tight labour conditions and low unemployment.  A net 63.1 percent of respondents think jobs are plentiful, up from a net 55 percent in the previous quarter.

Incomes have also been increasing and are expected to increase further.  A net 41 percent earned more than a year ago.  And a net 51 percent expected to be earning more a year from now.

This result is interesting as BERL sees crack appearing in employment growth.  In particular, Full Time Equivalent growth in the June 2007 quarter was only 0.7 percent higher than year earlier levels.  Are employees being over-optimistic?  Or has BERL been to quick in jumping off the bandwagon.  Time will tell.

The next ECI will be released on Wednesday 9 January 2008.

Source:  Westpac McDermott Miller Employment Confidence Index; 3 October 2007