NSW leads the charge
The overall outlook for the jobs market is positive, writes Michael Emerson.
The latest 2013 Fairfax Employment Forecast for the nation finds that the number of Australian jobs is continuing to grow and that this rate of growth is slowly lifting, now led by NSW instead of Western Australia.
In fact, a record level of employment was reached in 2013 in Australia. However, within these figures, there are large variations between states, industries, occupations and life-stage segments.
At the state level, NSW has been leading the charge with annual jobs growth of 1.8 per cent, whereas South Australia has been experiencing a soft environment, with no jobs growth at all. Other states are mixed, although both Victoria and Queensland are seeing some slight improvements in their jobs markets. Growth is easing in jobs powerhouse WA because of the slowdown in the mining sector.
Growth has stalled in this sector, which was such a strong performer until recently, but it has returned in several other industries, such as construction, partly as a result of a lift in consumer confidence and lower interest rates.
Retail is also showing slight improvement because of lower interest rates and better confidence.
There have also been large disparities in figures for employment between demographic and life-stage segments.
Generation Z has been experiencing a very soft job market, while jobs for twilight careers (workers over 63) have reached record levels in Australia.
In fact, Generation Z have known only difficult conditions since they entered the jobs market at 16, their relative lack of skills and experience being the main drivers for the weak market they find themselves in.
The managerial and professionals employment market is still expanding slightly, recording an annual growth rate of 0.8 per cent. This is quite fragile by historical standards and this market has been hesitant since 2010.
The employment market shows large variations for managers and professionals. Positions for managers have softened slightly, with jobs declining 0.7 per cent during the year. Conversely, jobs for professionals continue to grow strongly, with positions up
1.7 per cent. Roles for specialist managers are increasing again, being up 4 per cent after an unsteady 2012 and first half of 2013.
The forecast finds regional areas have maintained their share of Australia's employment during the past 15 years, showing that the economic benefits of employment growth over this time have been evenly spread between the capital cities and regional areas.
Turning to the outlook, the report finds there are positive signs. The world economy is improving and the risk of major softening in China appears to be receding. Europe and the United States are showing signs of growth, although the political wrangling over the US debt level is a significant downside risk.
On the home front, business and consumer confidence is growing, particularly after the recent federal election. Interest rates are at record low levels, which is starting to stimulate the non-mining sector and already housing prices are lifting.
Hours worked are up and job vacancies grew a little in August.
All these factors indicate an improved job market for Australia in the year to August 2014. A total of 193,000 jobs is forecast to be added to the Australian economy, about two-thirds of the growth rate before the global financial crisis.
Jobs for professionals and managers are also forecast to grow and the rate of this growth is expected to quicken, increasing to 2.6 per cent by the end of May 2014, well up from the current rate of 0.8 per cent annual growth.