These trends show up in the latest Hudson Report, just released. Employer sentiment has now built on the turnaround in the September quarter with a net effect of 10.7 per cent of employers now intending to increase permanent staff levels during the next three months.

The Hudson Report: Hiring Expectations shows the improvement from last quarter has gained momentum with the shift towards increasing head-count moving up 6 percentage points to 21.9 per cent this quarter.

Employers intending to reduce their permanent staff levels continued to decrease from 15.3 per cent to 11.2 per cent for the quarter. Meanwhile the proportion of employers intending to maintain current staff levels remained steady at 66.9 per cent from 68.8 per cent.

“The June quarter of 2009 was the first quarter of positive growth since the end of 2007 so there is a sense that the worst of the downturn is now behind us,” says Marc Burrage, executive general manager at Hudson.

“Slowly but surely businesses are starting to see signs that they are edging out of the downturn. Having carefully managed their businesses through the recession, employers are now starting to shape their organisation for future growth, but they will be taking these steps gradually,”

“While managing costs still remains a top priority, employers are developing new business strategies to take full advantage of market opportunities and ensure they have the right mix of skills to deliver future success.

"With many organisations operating at full capacity, some employers are considering taking on additional staff, in order to manage the workload and reduce stress on existing staff. This is borne out by the increasing number of employers intending to take on contractors or temporary staff,” says Burrage.

The New Zealand unemployment rate rose to a six-year high of 6.0 per cent in the June quarter, rising from 4.0 per cent 12 months ago when world markets collapsed. There are now 138,000 people who are unemployed nationally.

The economy is showing signs of pick up after five consecutive quarters of negative growth, however growth in GDP was just out of negative at 0.1 per cent for the June quarter and economists expect the recovery will be gradual and slow.

The improvement in global financial market conditions has prompted the Reserve Bank of New Zealand to withdraw several temporary crisis measures put in place last year to help ensure liquidity.

While there are increasing reports of rising business and consumer confidence, Finance Minister, Bill English recently stated that the effects of the recession and global credit crunch will be felt for some time and the “road to recovery will be pretty rocky”.

The upturn in sentiment recorded nationally tends to be across most industries. Sentiment in the IT industry remains stronger compared to other industries, with a net 25 per cent of employers intending to increase permanent staff.

Professional services also moved into positive territory with a strong rise of 22.6 percentage points to a net 17.2 per cent.

Sentiment in the manufacturing industry rose 11.8 percentage points and edged into positive, at 0.6 per cent, after being negative all year; retail sentiment rose a further 22.2 percentage points to net 15.2 per cent.

The construction/property/engineering industry also rose out of negative sentiment up 32.8 percentage points to 15.4 per cent after the long-anticipated commencement of public infrastructure projects; while government sector hiring intentions reported a net 8.3 per cent of employers planning to increase permanent headcount, after a rise of 7.8 percentage points.