The labour market reported surge in confidence level despite cuts in salaries and retrenchments, according to the latest confidence index released by Westpac McDermott Miller. The confidence index has reached to 103.0 which indicate more optimists than pessimists in the market.

Donna Purdue, senior economist at Westpac, said: "The survey detail reveals that current labour conditions remain extremely tough." However, employees continue to be buoyed by the hope that 2010 will be a whole lot better."

Labour conditions are not changed despite signs of recovery in the economy. Earning by labours declined 19 per cent in June quarter, as compared to the last year level, indicating tough employment conditions.

About 66.5 per cent respondents admitted that job hunting has been difficult in the current environment. Net 18 per cent respondents hoped that the coming year would bring secure job environment with plentiful job opportunities as market has started to head towards recovery.

Richard Miller, managing director of strategic planning consultancy McDermott Miller, said: "Many employees believe New Zealand is coming out of the recession and are feeling more secure in their jobs."