According to the latest Hudson Report Employment Expectations Survey, the market is showing signs of recovery with one in four employers planning to increase their permanent staffing levels in the next quarter, up 4.6% from the previous quarter.

The IT industry leads the charge with 52.3% of employers intending to increase their permanent staff levels over the coming three months.

Hudson says there is a desire in this industry to shift away from heavy use of contractors as a normal part of business.

More than a third (36.4%) of employers in telecommunications are planning to hire more permanent staff as the government’s ultra-fast broadband initiative begins to be rolled-out.

“This is the highest level of sentiment we’ve seen since mid-2008,” said Marc Burrage, Executive General Manager, Hudson New Zealand. “The improvement in sentiment shows that even though the New Zealand economy continues to remain subdued, the demand for staff is gradually picking up. Full time employment is up 1.8% over the past year, and unemployment has edged down from its late-2009 peak.

Hudson says the improvement in employment expectations has been consistent across the country, with all regions showing an increase in business confidence.

There’s been a “slight softening” in demand for contractors, with 14% of employers expecting to increase the size of their contracting workforce during the January – March period.

“What is clear from this quarter’s report is that while the New Zealand economy continues to remain cautious, the labour market is nevertheless showing recovery,” said Burrage.

“There is a greater sense of optimism, with employers continuing to grow in confidence and rebuilding their teams. Stronger economic growth is forecast from mid-2011 and we are likely to see demand for labour continue to increase, although this is likely to be gradual.”