Westpac-McDermott Miller Employment Confidence Index December 2025

The Westpac-McDermott Miller Employment Confidence Index (ECI) rose 3.9 points to 93.8 in the December quarter. This is the highest reading since March 2024, though it remains in subdued territory. A level below 100 indicates that there are more households who are pessimistic about the outlook than those who are optimistic.

“New Zealanders still see jobs as being in short supply,” said Michael Gordon, Senior Economist at Westpac. “However, there was a slight improvement in the December quarter, consistent with our view that the unemployment rate has peaked at its current level of 5.3%.”

There was more confidence about job security and opportunities in the year ahead, noted Mr Gordon. “There’s a growing sense that the economy has reached a turning point, although the labour market is typically one of the more lagging aspects of the economic cycle. For that reason, we expect only a gradual improvement in the unemployment rate over the course of 2026.”

Current and expected earnings growth remained subdued in the December quarter. “The existing slack in the labour market means that workers’ negotiating power has decreased, and with inflation back in the target range, cost-of-living increases have become correspondingly smaller,” said Mr Gordon.

The results were mixed across the country, with confidence rising in seven regions and falling in four. “In particular, the earnings measures of the survey were weaker in dairy-intensive regions such as Northland, Waikato, Canterbury and Southland,” noted Mr Gordon. “The recent falls in dairy prices may be weighing on earnings expectations across these regions.”

“Confidence amongst employees working in both the private and public sectors has risen this quarter,” noted Imogen Rendall, Market Research Director of McDermott Miller Limited. “Private sector employees’ confidence is up this quarter with an increase of 5.2 points to 96.8, and public sector employees’ confidence has increased 1.9 points to 96.0. Private and public sector employees remain particularly concerned about the current job market, with close to six in ten saying that jobs are currently hard to get,” observed Ms Rendall.

The survey was conducted over 1-11 December 2025, with a sample size of 1,550. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

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