Hobart skilled job vacancies hit 4-year high – Record job ads for health & welfare workers

Skilled job vacancies; Manufacturing

• Skilled vacancies: The Internet Vacancy Index fell by 0.6 per cent in September. The index is 1.6 per cent higher than a year ago – the slowest annual growth rate in 18 months.
• Tassie jobs surge: The Tasmania Internet Vacancy Index rose by 0.4 per cent in September. Vacancies are up by 16.0 per cent from a year ago. The index is at 6½-year highs at 59.4 points. And Hobart skilled vacancies are at the highest level in four years at 73.9 points in September, up by 4.5 per cent over the month and 17.5 per cent over the year.
• Healthcare skills shortage: The Internet Vacancy Index for Health and Welfare Support Workers’ rose by 0.6 per cent to a record-high level of 184.6 points in September, up by 1.9 per cent over the year.
• Manufacturing & services activity: The CBA/Markit ‘flash’ manufacturing purchasing managers’ index rose from 54.0 to 54.3 in October. But the CBA/Markit ‘flash’ services gauge fell from 52.2 to 50.8 in October – the lowest level since the series began in May 2016. Any reading over 50 indicates expansion.

The job internet vacancies data is a leading indicator of the job market and therefore important for consumer-focussed stocks and companies such as SEEK. The manufacturing data provides guidance for companies in the Industrials sector.

What does it all mean?

• The Aussie health care and social assistance sector created 154,400 jobs over the three years to August 2018, the most across all industries. And Australia’s largest employer (1.67 million jobs, 13.3 per cent total share) is likely to expand further based on September’s skilled internet job vacancies data.
• An aging population and government policies, such as the National Disability Insurance Scheme (NDIS) are driving employment. Across the country, record-high skilled job shortages have emerged for health and welfare support workers, health diagnostic and therapy labour, and medical practitioners and nurses.
• The Tassie economy is performing well, supported by robust household consumption, home building, business investment, public transport-related infrastructure spending and population growth. So it’s no surprise that skilled job vacancies are near seven-year highs in the Apple Isle, with skills shortages emerging in Hobart, with ads at four-year highs.

What do the figures show?

Skilled vacancies

• The Department of Jobs and Small Business Internet Vacancy Index fell by 0.6 per cent in September. The index is 1.6 per cent higher than a year ago – the slowest annual growth rate in 18 months.
• Job vacancies fell in seven of the eight occupational groups in September. The largest declines were recorded for Clerical and Administrative Workers (down by 1.7 per cent), Machinery Operators and Drivers (down by 1.3 per cent) and Labourers (down by 1.3 per cent). However, vacancies increased for Community and Personal Service Workers by 0.3 per cent.
• Job vacancies decreased in six of the states and territories in September: The largest falls were recorded for the Northern Territory (down by 1.6 per cent), Victoria (down by 1.0 per cent) and New South Wales (down by 0.6 per cent). But vacancies increased in Tasmania (up by 0.4 per cent) and the ACT (up by 0.1 per cent).
• Over the year to September, job vacancies rose in six of the eight occupational groups. The strongest gains were recorded for Professionals (up by 5.6 per cent), Technicians and Trades Workers (up by 4.2 per cent), and Community and Personal Service Workers (up by 2.9 per cent). But vacancies decreased for Labourers (down by 7.6 per cent) and Sales Workers (down by 7.2 per cent).
• Over the year to September, job vacancies increased in Tasmania (up by 16.0 per cent), Western Australia (up by 10.4 per cent), and Victoria (up by 5.0 per cent), but were flat in New South Wales. Falls were recorded in the Northern Territory (down by 9.3 per cent), Queensland (down by 2.5 per cent), South Australia (down by 2.4 per cent) and the ACT (down by 0.9 per cent).

‘Flash’ CBA/Markit Purchasing Managers’ Indexes: October

• The CBA/Markit ‘flash’ manufacturing purchasing managers’ index rose from 54.0 to 54.3 in October. But the CBA/Markit ‘flash’ services gauge fell from 52.2 to 50.8 in October – the lowest level since the series began in May 2016. Any reading over 50 indicates expansion.
• CBA noted: “The manufacturing and services sectors appear to be on a diverging path in the early part of Q4. Both sectors are expanding. But while manufacturing is turning up again, service activity edged lower again. Both sectors are reporting strong jobs growth, however. And new orders continue to lift. The outlook for the remainder of 2018 is still positive. One emerging concern to monitor is that some respondents see downside risks from greater regulation of the finance sector.”
• Further, CBA noted: “The lift in business capex over the past year appears to have eased earlier capacity constraints. Measures of the backlog of work have fallen and now sit at neutral levels. Nevertheless, input and output prices are rising at a solid pace. Higher fuel prices and staff costs are still flowing through. And the recent drop in the AUD appears to be having an impact as well.”

What is the importance of the economic data?

• The Department of Jobs & Small Business releases a monthly Internet Vacancy Index. The index is based on a count of online job advertisements newly lodged on three main job boards (SEEK, CareerOne and Australian JobSearch) during the month. The index is the only publicly available source of detailed data for online vacancies, including around 350 occupations (at all skill levels), as well as for all states/territories and 37 regions.
• CBA and Markit also compile purchasing manager surveys for manufacturing and services sectors. The surveys are amongst the timeliest economic indicators released in Australia. The surveys are useful not just in showing how key sectors are performing but also in providing some sense about where they are headed. The key ‘forward looking’ components are orders and employment.

What are the implications for interest rates and investors?

• The Aussie job creation machine is supporting consumer spending and confidence. And the outlook is positive. But leading indicators of jobs growth from the Bureau of Statistics, ANZ, SEEK, Department of Jobs and Small Business and NAB have produced mixed outcomes in recent months. Broadly, most indicators are near the best levels in 5-7 years, but divergences are evident with LinkedIn, Indeed and other online recruitment websites increasing in importance for job seekers.
• Either way, Reserve Bank Governor Guy Debelle recently said that “employment is likely to grow a bit above its long-term average over the next six months…[but] there is an increasing skill mismatch between unemployed workers and available jobs… there has been a large increase in vacancies but only a small decline in the unemployment rate.”
• Tasmania and Western Australia are leading when it comes to skilled job vacancies, signalling a further improvement in both states’ labour markets. This is good news given that both states have generally had the highest unemployment rates across the nation.
• Overall, the relationship between leading job market indicators, employment growth and the transmission to wages growth remains the key to the improving Australian economic backdrop.
• The renaissance in Aussie manufacturing continues. Manufacturing activity was supposedly under threat from the end of local car production by Ford and Holden, but employment levels are around the highest in seven years, supported by strong Chinese demand for high-quality food products, manufactured mining goods and infrastructure-related spending.
• CommSec expects official interest rates to remain stable until late 2019.