New Zealanders are still pessimistic about the state of the employment market amid rising anxiety among public servants over looming job cuts as the government looks to cut costs.
The Westpac-McDermott Miller Employment Confidence Index fell 0.7 points to 98.9 in the March quarter, as gloomy state sector workers dragged down the index. The Public Sector Employment Confidence Index fell 2.4 points to 93.5, while private sector employees were still optimistic with a reading of 101.6.
"Clearly government sector restructuring is making the sector's employees anxious about the security of their jobs - a net 6.1 per cent now believe their job will become less secure over the coming year," McDermott Miller managing director Richard Miller said.
"Public sector employees who perceive NZ will have bad economic times over the next year are more likely to be blame government policy for this situation than are private sector employees," he said.
The divide between public and private sector employment confidence comes as the sinking lid in New Zealand's state service threatens to add to Wellington's rising unemployment.
The capital city's jobless rate rose to 7.3 per cent in the December quarter last year, ranking it behind Northland and Bay of Plenty.
The current employment conditions index improved 0.2 points to 84 in the quarter, while the employment expectations index fell 1.3 points to 108.8.
Westpac chief economist Dominick Stephens said the report suggests household sentiment is fragile in spite of the improving housing market.
"While people remain cautiously optimistic for their own job situation, they are expressing deep misgivings about the prospects for the labour market overall," Stephens said. "That's at odds with other evidence that the domestic economy has been picking up, notably in the housing market, and raises the question how much further that lift may have to run."
The survey of 1,551 people showed household earnings have been gradually gaining since 2010, but are still below their 2008 levels. It also showed little sign of wage inflation pressures from the Canterbury rebuild.