Economy builds some muscle
Latest numbers show signs of growth, writes Michael Emerson.
Australian employment has plateaued at near record levels, with 11.7 million people now employed across the nation. However, within these figures are wide variations across industries, occupations and age demographics.
In the latest data just released by the ABS for the year to August, there are some signs of strengthening in the economy, as the transport sector has returned to growth with jobs up 5.2 per cent this quarter.
In other signs that growth is slowly returning to some sectors, the wholesale trade sector grew jobs at 5.1 per cent and the construction industry also grew jobs at 5.2 per cent, reflecting the reduction in interest rates as finance becomes cheaper to obtain.
Despite all the talk of government cutbacks, public sector positions grew the most in the year, with jobs up 3.7 per cent. One sector showing near continuous growth is the health and community services industry, with growth this quarter of 1.9 per cent. The underlying demand drivers here are strong (population growth, ageing of the population and higher expectations of treatment).
Education and training grew at 1.7 per cent and the retail trade sector is also coming back to life thanks to lower interest rates and improved consumer confidence.
The agricultural industry is down 5.8 per cent and manufacturing is down 2.3 per cent. Both have been in decline for years, although it's worth remembering that both industries still employ more people than the mining industry.
Other sectors where jobs are down include the media and telecommunications industry, declining 6.3 per cent thanks to job cuts in traditional media and telcos. Employment among the utilities is also down 3.8 per cent despite big price increases here.
Finance and insurance services positions are slightly down, but with business and consumer confidence lifting and low interest rates, this sector should return to growth in
In a rare occurrence (since China discovered how to develop rapidly), the mining sector shed jobs, but only just, at 0.4 per cent. More recently the outlook has got better here, and commodity prices have improved, so this looks more like a temporary hiatus in strong growth rather than the start of a general decline.
The stated aim of the Reserve Bank to lift the non-mining sector is showing some signs of starting to work, with some non-mining industries growing again.
In the year to August, the winners among the demographics have generally been the experienced and more skilled workers, with positions for professionals growing at 0.5 per cent. On the other hand, labouring jobs are down 0.7 per cent.
Teenagers have found the job market tough, with jobs for them falling 0.9 per cent. Jobs for this age group have been falling since early 2012. This is fairly typical; when the economy hits a soft spot, the young, inexperienced, less skilled workers suffer the most.
The jobs market for 20-24-year-olds has also been tough, with jobs down 0.5 per cent. Unusually, the decline for this age group has been at the professional and managerial levels, indicating there may be a shortage of these types of middle managers and experienced professionals in the future. Among 25-34-year-olds the job market has been pretty good, with jobs up 1.8 per cent in the year to August.
The real winners are older workers aged 65-plus. Jobs for this demographic have risen 5.1 per cent, and, perhaps surprisingly, there are 48,000 labourers within this sector.