Feared restructures can come with a hire purpose
However, what we often forget is that restructuring can also work in the other direction. For all the tens of thousands of jobs that have been cut in struggling industries in recent years, just as many have been created elsewhere. But unlike the job losses, we rarely hear about these.
Several hundred positions being cut by one employer can end up on front pages, but the same number being created across various employers tends to go unreported.
The healthcare industry - one of the biggest contributors to jobs growth in the latest quarter - is a classic example of an industry on the positive side of "structural change." Not only did it post solid growth over the quarter, as the graph shows, it is also on the long-term expansion path.
Last year's census showed "healthcare and social assistance" had become the biggest source of employment in Australia, overtaking retail. It employs about one in nine of the people in the workforce, and will only grow as the population ages and more of us require medical assistance.
Clearly, though, we can't all work in healthcare. So what other parts of the economy are growing?
Recent research by economists at the Commonwealth Bank shows there have been several other big sectors expanding over the long term.
In the past decade, they found, the economy had created 2.4 million jobs, with the largest gains after health coming in construction, professional services, education and mining.
The only sectors that shrank were manufacturing and farming, while communications - which includes the media - remained the same size. Of course, you'd expect plenty of jobs to be created over a 10-year period, in line with population growth. What about the more recent past?
It's true the labour market is weak, with unemployment rising slightly so far this year. But the graph shows that despite this weakness, several industries are still creating jobs. And the gains may not always be where you expect.
In the latest quarter, for instance, retail made the biggest job gains despite reports of the industry's demise.
Just to prove this wasn't a statistical error, it was also the top performer over the previous year.
Without doubt, the deep-seated shifts sweeping through many industries are unsettling, and often traumatic. But despite all the pain of "structural change", it doesn't always have to be a bad-news story.
Frequently Asked Questions about this Article…
The article explains that ‘restructuring’ often has a negative connotation because it can mean job cuts at a single employer, but it can also lead to job creation elsewhere. For investors, that means structural change isn’t always bad news — while some industries shrink, others expand and create new opportunities over time.
According to research by Commonwealth Bank economists cited in the article, Australia created about 2.4 million jobs in the past decade. After healthcare, the largest gains came in construction, professional services, education and mining.
Yes. The article notes last year’s census showed ‘healthcare and social assistance’ became the largest source of employment in Australia, overtaking retail. It employs around one in nine workers and is expected to grow as the population ages.
The article states that manufacturing and farming were the only sectors that shrank over the past decade, while communications — which includes media — remained about the same size.
Yes. The article points out that despite a slightly weaker labour market and a small rise in unemployment this year, several industries continued to create jobs. Notably, retail made the biggest job gains in the latest quarter and was the top performer over the previous year.
Large job cuts by a single employer are easy to headline, whereas the same number of new roles spread across many employers tends not to be reported. The article highlights that this reporting imbalance can mask the positive side of restructuring.
Structural change describes long-term shifts in which industries grow or shrink. The article acknowledges these shifts can be unsettling and traumatic for workers in declining sectors, but they can also produce widespread job creation in growing industries — making them not automatically bad news.
Based on the article, investors looking for long-term growth trends should watch sectors that have consistently expanded, such as healthcare, construction, professional services, education and mining. These areas have added substantial jobs over the past decade and can reflect broader structural change in the economy.
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