Skilled job vacancies
- Skilled job vacancies: In trend terms, the Internet Vacancy Index decreased by 0.7 per cent in September – the 9th successive monthly fall. The index is 7.1 per cent lower than a year ago – the biggest annual decline in 5½ years. But the index is 8.1 per cent above the level recorded five years ago.
- Capital city job vacancies: In the year to September, job vacancies increased in Canberra (up by 12.9 per cent), Hobart (up by 12.7 per cent), Perth (up by 1.3 per cent) and Adelaide (up by 0.8 per cent). But vacancies fell in Sydney (down by 14.7 per cent), Melbourne (down by 7.4 per cent), Brisbane (down by 5.9 per cent) and Darwin (down by 5.1 per cent).
The internet job vacancies data is a leading indicator of the job market and therefore important for consumer-focussed stocks and companies.
What does it all mean?
- Aussie jobs growth remains solid. In fact, Australia has clocked up 36 consecutive months of job gains – a record. The unemployment rate in the ACT is the lowest in the nation at 3.5 per cent. Canberra’s job vacancies were almost 13 per cent higher than a year ago in September – the strongest growth rate in three years.
- So where are the jobs being created in the nation’s capital? In September, record job vacancies exist for: Legal, Social and Welfare Professionals; Information Professionals; Sales, Marketing & Public Relations Professionals; Health Diagnostic and Therapy Professionals; Construction Trades Workers; Hospitality Workers; Other Clerical and Administrative Workers; and General-Inquiry Clerks, Call Centre Workers and Receptionists.
- But there are reasons to be cautious. Australia-wide skilled internet job vacancies have fallen for nine successive months, posting the weakest annual growth rate in 5½ years in September.
- Weakness in job ads is particularly pronounced in Australia’s most populous cities – Sydney and Melbourne. In September, job vacancies in both cities were up to 14.7 per cent lower than a year ago, signalling that unemployment rates are likely to lift in both NSW (4.5 per cent) and Victoria (4.7 per cent). Both states have experienced strong jobs growth (+110,800 jobs in NSW and +102,800 jobs in Victoria) over the year to September. But more modest gains are expected in the coming months, despite a recent moderation in the downturn.
What do the figures show?
Skilled job vacancies
- The Department of Employment Internet Vacancy Index fell by 0.7 per cent in September. The index is 7.1 per cent lower than a year ago although it is up 8.1 per cent above the level recorded five years ago.
- In September 2019: “Job advertisements decreased across all eight occupational groups. The strongest decreases were recorded in Clerical and Administrative Workers (down by 1.1 per cent), Sales Workers (0.9 per cent), Machinery Operators and Drivers (0.7 per cent) and Labourers (0.7 per cent).”
- Over the year to September 2019: “Job advertisements fell in seven of the eight occupational groups, with the strongest falls recorded for Machinery Operators and Drivers (down by 15.6 per cent), Sales Workers (13.1 per cent) and Clerical and Administrative Workers (11.3 per cent). An increase was recorded in Community and Personal Service Workers (up by 3.1 per cent).”
- Over the year to September 2019, 12 of the 48 detailed occupational groups recorded increases in job advertisements. “The largest increases were recorded for a range of education and health related occupations such as Education Professionals (up by 900 job advertisements), followed by Health Diagnostic and Therapy Professionals (510), Hospitality Workers (370), Medical Practitioners and Nurses (270) and Carers and Aides (170).”
- “The largest decrease was recorded for General-Inquiry Clerks, Call Centre Workers, and Receptionists (down by 1420 job advertisements), followed by Sales Assistants and Salespersons (1150), Corporate Managers (1070), Construction, Production and Distribution Managers (880) and Business, Finance and Human Resource Professionals (850).”
- Job vacancies decreased in five states and one territory in September: NSW (down 1.0 per cent), Victoria (down 0.2 per cent); Queensland (down 0.5 per cent); South Australia (down 0.3 per cent); Western Australia (flat); Tasmania (down 0.4 per cent); Northern Territory (down 1.0 per cent); and ACT (up 0.5 per cent).
- Over the year to September 2019, job vacancies rose in three states and one territory: NSW (down 13.6 per cent), Victoria (down 7.6 per cent); Queensland (down 3.6 per cent); South Australia (up 1.1 per cent); Western Australia (up 1.4 per cent); Tasmania (up 5.9 per cent); Northern Territory (down 9.2 per cent); and ACT (up 12.3 per cent).
- Over the year to September 2019, in three month moving average terms, job advertisements decreased in 23 of 37 regions. “The strongest decreases in job advertisements were recorded in Sydney (down by 14.7 per cent), followed by Gosford & Central Coast NSW (11.5 per cent), Melbourne (7.4 per cent), Gold Coast (6.9 per cent) and Toowoomba and South West Queensland (6.2 per cent).”
- “The largest increases were recorded in Canberra & ACT (up by 12.9 per cent) and Hobart & Southeast Tasmania (12.7 per cent).”
What is the importance of the economic data?
- The Department of Employment 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.
What are the implications for interest rates and investors?
- Australia’s Treasury Secretary Steven Kennedy described recent employment data as “strong” at a Senate Estimates hearing in Federal Parliament today. But the lack of momentum on job vacancies points to slower employment growth ahead.
- Commonwealth Bank Group economists expect a rate cut in February 2020 after a pause. The Reserve Bank still wants to see the unemployment rate closer to 4.5 per cent and inflation near 2.5 per cent.
- Of course, with limited conventional monetary policy ammunition at its disposal, the Reserve Bank would prefer to see additional fiscal initiatives potentially be announced by the Federal Government to prop up economic activity.