New Zealand employment confidence rose 3.2 points in the September quarter to 86.3 from 83.1 in the June quarter, only slightly reversing the sharp 12.5-point decline in the previous quarter, according to the Westpac-McDermott Miller Employment Confidence index released Tuesday.

The last two readings have been the lowest for the survey since it began in September 2004, according to the report. Perceptions of current job opportunities remained weak, but there was a rise in expected job opportunities for the year ahead. The employment expectations index jumped to 4.1 points sequentially to 94.9 in the September quarter from 90.8.

Employment has been picking up gradually, but not enough yet to match the growth in the labor force, resulting in a further rise in the unemployment rate to an 11-year high of 5.6%. However, the analysts expect that this will mark the peak unemployment for the current cycle, with a gradual decline starting from the second half of the year.

Employment confidence rose in eight of the 11 regions in the survey. Northland saw the greatest jump in employment confidence over the period, increasing by 16.4 points quarter-over-quarter in September to 90.1, followed by Otago, which lifted by 5.8 points to 84.2.

Confidence in Taranaki/Manawatu-Whanganui fell by 10.9 points over the period to 76.9, due to falls in expected earnings growth and job security.

A total of 60% of respondents in the September survey felt that it's hard to find a job. The report forecast a gradual improvement in the jobs market in the months ahead as the economy regains momentum, although fuel prices continue to present headwinds.