Economic surveys are reflecting fragility and opposing sentiments in employment and business confidence, much of which appears to ride on the prosperity of housing and construction activity.
Separate surveys released yesterday show employers and employees respective expectations are at odds, but the surveys both highlight the importance of the housing market and construction sectors and both question how far those sectors can underpin recovery.
The expected push of work on Christchurch's rebuild has been slow to start in earnest, and building consents in many regions have been near their lows, or sluggish at best,during recent months.
In the Westpac McDermott Miller "household" employment confidence survey yesterday, its index fell to 98.9 for the March quarter, its third consecutive decline, while the National Bank's economic outlook on business confidence continued to rise, on expectations of better times ahead for the economy, on several fronts.
Westpac chief economist Dominick Stephens said while people remained "cautiously optimistic" for their own job situations, they were expressing "deep misgivings about prospects for the labour market overall".
"Both today's [survey] numbers and the latest consumer confidence report suggest that sentiment in the household sector is still pretty fragile.
"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," Mr Stephens said.
The National Bank survey highlighted several business outlook positives and said the economy was moving in the right direction.
"However, this comes with a sting in the tail," a bank economist said.
The improvements were being led by housing and construction, but with the current account deficit at 4% of gross domestic product and a net external liability standing at 72% of GDP, the economist said "the housing market can only take us so far".
"Getting growth is not the only game in town. We need the right mix".
BNZ head of research Stephen Toplis said confidence by both businesses and consumers was "lofty" and cautioned that the bank's view of global growth was "heavily predicated' on a surge in construction, particularly residential.
"The problem is that the data flow for both these economic drivers threatens to fall short of the buoyant expectations," he said in a statement.
The BNZ is forecasting growth at 2.2% this calendar year and 2.9% in 2013, and while "unspectacular", 2.2% would be the strongest growth rate since 2007, he said.
The National Bank's business outlook found employment intentions rose four points. A net 12% of businesses expected to be hiring staff, up from a 8% in February, profit expectations rose from +10 to +14, which augured well for reinvestment in the form of hiring and plant.
"Export intentions continue to recover. A net 21% of businesses expect export volumes to lift over the coming year, up from +19 a month ago," the economist said.
Mr Stephens, from Westpac, said 57% of households said that jobs were hard to get, down from 62% in the previous survey, but it was "still the most downbeat since late-2010".
The balance of households which reported an increase in employment earnings during the past year fell, from 29% to 25%, but the balance expecting earnings to rise during the year ahead rose slightly, from 32% to 33%.
Mr Stephens noted the number of households reporting rising earnings was not especially high in the Canterbury region.
"While we expect the Christchurch reconstruction project to cause an inflation headache for the Reserve Bank in the next couple of years, today's survey suggests we're not at that point just yet," he said.
