KEY POINTS:
Confidence among New Zealand employers about hiring new staff has fallen sharply, a survey by recruitment firm Hudson shows.
The latest half-yearly Hudson Report shows a net 7.9 per cent of organisations expect to employ more people in the first six months of next year, down from 18.9
per cent in the previous survey.
It is the lowest level recorded since the survey began in 1999.
Hudson says the result reflects the difficulties employers are having in forecasting future demand.
General manager Roman Rogers said it wasn't just about what was happening in New Zealand.
"Businesses are wondering, 'have we seen the full effects of the international recession or will there be further impacts?"'
One standout sector which remains robust is the IT industry, where a net 36.1 per cent of employers intend to increase permanent staff. Rogers said this was because of the continuing skills shortage in the area, and the fact that many New Zealand businesses still had a long way to go in upgrading their systems to achieve productivity gains.
The manufacturing, retailing, construction/property and financial services sectors are much less confident. A net 29 per cent of manufacturing employers and 25.7 per cent of retail organisations intend to reduce staff in the next six months.
The lower North Island region fares the best, with 17.9 per cent of employers reporting an intention to increase staff.
Rogers said this was driven by employer confidence in the IT sector, and by the government sector. "The Government's a pretty large customer for many organisations in Wellington."
This compares with the upper North Island where only 2.8 per cent of employers plan to hire more people. The figure is even lower in the South Island where just 0.3 per cent of employers intend to do more hiring.
In terms of business size, small businesses are the most confident, with a net 18.4 per cent expecting to increase their permanent staff levels. Rogers believed this was because many small enterprises had been running lean for a long time. Just 3.7 per cent of medium-sized and 9.9 per cent of large companies plan more hiring.
Unemployment stands at 4.2 per cent, up from 3.4 per cent a year ago.
Westpac chief economist Brendan O'Donovan said it was hard to generalise about job prospects because it varied from sector to sector, but overall businesses were under a lot of pressure to reduce costs.
"They're looking to be pre-emptive in terms of getting on top of their costs. Unfortunately that entails job losses."