20 Jan 2014

Job market still subdued - report

7:25 pm on 20 January 2014

Westpac's latest survey on employment confidence shows it rose slightly in the December quarter to 103.4.

A reading above 100 points indicates more optimists than pessimists and the outcome is the second-highest reading in the past two years.

However, a number of sub-indicies declined. Expected earnings growth fell more than 3.3 points to just over 29, and perceptions of own job security fell 3 points to 10.

Westpac economist Michael Gordon said for those in work, expectations of pay rises had been subdued and trending lower in recent years.

"It's been an ongoing story that the labour market has been one of the relative laggards in this recovery," he said.

There was still productive capacity in the economy, which was keeping employment intentions relatively subdued.

"I think it's fair to say that while we're starting to see the economy get some momentum in terms of the rate of growth, we're still operating below what we might consider full capacity, so there's still room to ramp up production without firms really looking at hiring in great numbers just yet," Mr Gordon said.

That was expected to start changing in the next year, when more notable shortages of workers could be seen. However, households were still finding new jobs scarce, he said.