The Westpac-McDermott Miller Employment Confidence Index rose 3.3 points to 104.8 in the March quarter, gaining for a second period from a three-year low in September.

A reading above 100 indicates optimists outweigh pessimists. The present conditions index gained 5.5 points to 99.7 and the employment expectations index increased 1.8 points to 108.3.


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"The improvement in employment confidence we've seen over the last couple of quarters is broadly consistent with other data on the labour market," Westpac Banking Corp economist Anne Boniface said in a note. "For now, demand for workers is at least keeping pace with rapid population growth, if not managing to outpace it."

Record inflows of new migrants have been swelling the labour force over the past year, filling new jobs created from an expanding economy and helping limit wage growth in a benign inflation environment.

Westpac's survey showed a net 28.2 percent of the 1,554 respondents received increased earnings from a year earlier, up from 21.7 percent in the December quarter, and 27.8 percent anticipate earnings growth, up from 26.3 percent.

Boniface said the earnings component was one of the most notable improvements in the survey and was tempered by workers' caution about their own job security, which increased to a net 12.8 percent from 12.3 percent in December.

The lift in employment confidence was largely driven in Auckland and urban areas of Canterbury, where confidence rose 4.1 points to 110 and 6.9 points to 110.6 respectively.

Wellington workers remained pessimistic, on balance, although confidence rose 2.3 points to an index reading of 99.3.

Across the regions, Gisborne/Hawke's Bay was the most optimistic, up 13.4 points to 111.4, as it benefited from increased tourism and upbeat viticulture and horticulture sectors while Taranaki/Manawatu dropped 8.5 points to 93.3 as it contended with a downturn in the dairy and energy sectors.