Jobs Report Issue 2, June 2012
A number of Australian industries have faced difficulties in recent months, particularly as a result of the strong Australian dollar. Trade-exposed sectors like manufacturing and tourism, in particular, have faced challenges, and there have been well-publicised job losses in those and other industries.
Despite the difficulties in some sections of the economy, employment growth has picked up in recent months. The number of Australians in work rose by nearly 40 000 in May, with all of the net new jobs being full time jobs. The unemployment rate has been hovering between 5% and 5.25% since late 2010 – a slight rise at the end of last year has slowly been reversed in 2012.
Treasury and the RBA expect that the unemployment rate will rise slightly in the coming months, to around 5.5%. Data on job vacancies, unemployment expectations, and consumer sentiment all point to a slight worsening in the labour market in the coming months.
This edition of the ACTU Jobs Report includes a feature on the regional spread of unemployment across Australia. If you have any comments or questions about this report, or suggestions for future reports, please contact Matt Cowgill at mcowgill@actu.org.au.
Employment data at a glance Employed persons
Level
Monthly change
Year-ended change
11 537 900
+38 900
+111 500
-
Full time employment
8 107 900
+46 100
+90 800
-
Part time employment
3 430 100
-7 200
+20 700
18 576 000
+19 700
+224 700
5.1%
+0.1pps
+0.1pps
622 800
+22 400
+26 800
Underemployment rate (quarterly)
7.4%
+0.1pps
+0.3pps
Participation rate
65.5%
+0.3pps
No change
Employment-to-population ratio
62.1%
+0.1pps
-0.2pps
Working age population Unemployment rate Unemployed persons
Source: ABS. All figures are seasonally adjusted unless otherwise noted. Figures refer to the month of May unless otherwise noted. Estimates of the working age population are imputed from the data. Underemployment data are quarterly. “pps” = percentage points.
ACTU Jobs Report | June 2012
| Page 1
Employment and unemployment The number of full time workers rose by 46 100 in May,
Employment rose by 0.3% in May, while the working-age
while part time employment shrank. Overall, 38 900
population rose by only 0.1%. This means that a key
more people were employed in May than in April. Over
labour market indicator, the employment-to-population
the year to May, employment was up by 111 500 people.
ratio, rose in May. This continues a positive trend - the
This is fairly modest employment growth over the year,
proportion of working-age Australians have jobs has
not enough to keep up with population growth, but the
been slowly inching upwards since late 2011. However,
trend is positive. Labour market conditions have clearly
the ratio remains below its record high reached before
improved in the past six months or so, after weakening
the GFC, and also below the level reached in late-2010
in mid-to-late 2011. Figure 1 and Figure 2 show the
in the wake of the post-GFC recovery.
change in employment over the month and the year to Figure 3: Employment-to-population ratio
May, broken down by gender and employment status.
Per cent 64
Figure 1: Monthly change in employment (May 2012) Thousands 50 40
63
46.1 38.9
34.8
30 20.8 20
61 18.0
11.3
60
6.7
10
62
59
0
Seasonally adjusted -10
-7.2
58 May 02
-14.0
-20 Full time Males
Part time Females Persons
Total
May 06
May 08
May 10
May 12
Source: ABS 6202
The pick-up in full time employment is particularly
Source: ACTU calculations based on ABS 6202
Figure 2: Change in employment in the year to May
welcome. Since May 2008, when the first rumblings of the GFC began to make themselves apparent, part time
Thousands 120
111.5
100
work has risen by 10.7%, the population has grown by 7.3%, but full time work has only grown by 4.2%. The
90.8 79.3
80
May 04
Trend
number of Australians in full time work has been essentially flat for around 18 months. We can only hope
68.7
that the strong result in May is the beginning of a period 60
of sustained growth in full time work. Figure 4, below,
40
32.2 22.1
20
shows the change in part time and full time employment, as well as the working-age population, since May 2008.
20.7
Each series is set to equal 100 in May 2008, so a value
10.0 10.6
of 110.7 in May 2012 means that the number of people 0 Full time Males
Part time Females Persons
Total
in part time work has risen by 10.7% over the period.
Source: ACTU calculations based on ABS 6202.
ACTU Jobs Report | June 2012
| Page 2
Figure 4: Change in employment and population since May 2008 Index 112
In May, the labour force rose by about 61 000 people. As a result, the participation rate, the employment ratio and the unemployment rate all rose.
110.7
110
The participation rate is slightly below the all-time peak 108
107.3
of 66% reached in late 2010, but is still quite high in historical terms. It’s expected that there will be
106 104.2
104
downward pressure on the participation rate in the coming years as the ‘baby boom’ generation begins to
102
retire en masse.
100
Figure 6: Participation rate
Part time employment Working age population
98
Per cent 67
Full time employment 96 May 08
May 09
May 10
May 11
May 12
66
Source: ACTU calculations based on ABS 6202.
65
The most closely watched indicator of labour market conditions is the unemployment rate, which has hovered
64
between 5% and 5.3% since late-2010. Unemployment rose a little in mid-to-late 2011 and has improved in
63
2012.
Seasonally adjusted 62 May 02
Figure 5: Unemployment rate Per cent 6.0
May 06
May 08
May 10
May 12
Source: ABS 6202.
The number of hours per working-age person has
5.5
stabilised at around 88 per month after dipping in January.
5.0
Figure 7: Total hours worked per person aged 15+
4.5
Hours per person per month 92
4.0 Seasonally adjusted 3.5 May 07
Trend 90
May 08
May 09
May 10
May 11
May 12
Source: ABS 6202.
As
May 04
Trend
shown
unemployment
88
above, rate
the rose
seasonally in
May,
even
adjusted though
86
employment growth was strong. This might seem like a paradox or an error to some, but the apparent anomaly
84
is explained by the rise in the labour force participation rate in May. If you’re not in work, and you’re not actively looking for work, then you’re not counted as being part
82 May 02
of the labour force for the purposes of the ABS survey.
Source: ACTU calculations based on ABS 6202.
May 04
May 06
May 08
May 10
ACTU Jobs Report | June 2012
May 12
| Page 3
Feature: The regional spread of unemployment The Australian economy is operating at multiple ‘speeds’
unemployment rate of any state/territory in a particular
– the north-west of the country is booming, while the
month, and the lowest rate in the same month. Between
south-east is growing much more slowly. Treasury
1980 and 2002, this gap averaged 4.4 percentage
estimates that the resource-related sections of the
points. Since 2003, when the resources boom really
Australian economy have grown at over 10% per annum
began to take hold, this gap has averaged 2.8%. The
in the past two years, while the non-resources related
rise in Tasmanian unemployment in the past six months
sectors have grown at less than 2%. Because mining
has seen the gap rise above its post-2003 average, but
activity is concentrated in particular regions, that
it remains below the average for the previous decades.
dispersion of activities between industries translates into divergence
between
the
Australian
states.
WA’s
unemployment rate in May was 3.8%, while Tasmania’s was nearly double that at 7.3% (see Figure 12 of this
Figure 9: The gap between the highest and lowest unemployment rates of the states and territories Percentage points
report). 6
However, it’s a little known fact that the gap between the
5
highest and lowest unemployment rates of the states and territories has been lower in the past decade than it
Average gap 2003present, 2.8
4
was in the 1980s and 90s. Figure 8 shows the highest 3
and lowest unemployment rates, and the overall national rate, for the past two decades.
2
Figure 8: The highest and lowest unemployment rates of the states and territories since 1992
1
Per cent 14
0 1982
12
1987
1992
1997
2002
2007
2012
Source: ACTU calculations based on ABS 6202.
Analysis of data on the unemployment rates of small
Highest State/Territory rate
10
regions by the Treasury shows that this pattern holds for 1
8
small areas just as it does for states. As the overall Australia
unemployment rate has come down, so has the
6
dispersion between unemployment rates at a regional
4
level.
Lowest State/Territory rate
2 0 Apr 1992
Average gap 1980-2002, 4.4
The Australian labour market is undeniably ‘multi-speed’, but it always has been, to some degree. There is reason
Apr 1997
Apr 2002
Apr 2007
Apr 2012
Source: ACTU calculations based on ABS 6202.
to believe that the current gap between states and regions, at least in terms of unemployment, is smaller than in the pre-mining boom period.
As the national unemployment rate has come down, so has the gap between the top and bottom lines in Figure 8. A clearer way of visualising this is in Figure 9, which shows the percentage point gap between the highest
1
Gruen, D. 2011, ‘The Macroeconomic and Structural Implications of a Once-in-a-Lifetime Boom in the Terms of Trade’, Address to the Australian Business Economists Annual Conference, 24 November. ACTU Jobs Report | June 2012 | Page 4
Employment by state The number of people employed in WA rose by nearly
in that state over the year. The NT’s rate of growth was
50 000 over the year to May, continuing that state’s
second; the ACT also recorded solid employment growth
strong mining-led employment growth.
2
NSW and
over the year. This is somewhat surprising given the
Victoria came second and third, respectively, in the
restrictions on budgets in the Commonwealth public
number of net new jobs added over the year. This is
sector, the weak wages growth in the ACT, and the job
shown in Figure 10. Because NSW and Victoria are the
losses in the public administration industry. The number
two
of people in work fell in Tasmania and South Australia,
biggest
states,
their
employment
growth
in
percentage terms was weaker, as shown in Figure 11.
the rate of population growth.
Figure 10: Change in employment by State (year to May 2012) WA
Australia
49.6
NSW
3.9
Qld
3.8
NT
2.6
SA
-0.6
Tas
-1.0 -20
three –
‘speeds’
when
Tasmania
has
and
the
other
states
are
in
the
to
highest
the
middle.
The
having blown out from 5.4% to 7.3% over the year.
Figure 12: Unemployment rates by State 5.4
Tas 0
20 40 Yearly change (thousands)
7.3
60
4.8
Vic
5.5 5.4 5.5 5.3 5.2 5.1 4.9
Qld Figure 11: Percentage change in employment by state (Year to May 2012) WA
SA
4.0%
NT
NSW
2.2%
ACT NSW
0.8%
Vic
0.7%
Qld
0.2%
SA
-0.1%
Tas
-0.4%
4.2 3.8 3.6 4.0 3.9 3.4
WA
1.9%
0%
comes
unemployment rate in Tasmania is a particular concern,
Source: ACTU calculations based on ABS 6202.
-1%
it
unemployment; WA and the territories have the lowest;
20.9
ACT
has
unemployment
28.7
Vic
while NSW and Victoria recorded modest growth, below
NT ACT 0
1% 2% 3% Yearly change (%)
4%
5%
Source: ACTU calculations based on ABS 6202.
2
4 Per cent May 2011 May 2012
6
8
Source: ABS 6202.
Despite the often-discussed ‘patchwork economy’, the gaps between unemployment rates across the states (or
The fastest rate of jobs growth over the year to May was
smaller regions) have fallen in recent years as the
in WA, with the number of employed people rising by 4%
overall unemployment rate has come down. However, the sharp increase in Tasmanian unemployment raises
2
Note that all information about employment by state and industry in this report uses the ABS trend estimate rather than the seasonally adjusted figure.
the possibility that the gaps between states could begin to grow once more. ACTU Jobs Report | June 2012
| Page 5
Employment by industry In the May quarter, the Professional, Scientific and Technical Services industry grew by 21 200 employed persons, the largest employment increase in the quarter. This industry includes scientific research, architectural and engineering services, legal and accounting services, and a range of other areas, many of which are likely to have benefited from the resources boom.
In the Mining industry itself, the 14 500 extra employees added in the May quarter represented an astonishing 5.7% quarterly growth rate in that industry, the strongest quarterly growth in proportionate terms.
The Construction industry shed 18 500 employees, a 1.8% quarterly contraction in employment. The number
Figure 13: Employment change in the May quarter (thousands) Professional, Scientific &…
21.2
Education & Training
18.0
Mining
14.5
Agriculture, Forestry & Fishing
9.5
Information Media &…
9.4
Rental, Hiring & Real Estate…
9.3
Health Care & Social Assistance
6.4
Manufacturing
3.0
Arts & Recreation Services
0.8
Electricity, Gas, Water & Waste…
0.6
Financial & Insurance Services
0.1
Accommodation & Food Services
-0.9
Other Services
-0.9
Administrative & Support…
-2.4
Retail Trade
-4.2
Wholesale Trade
-8.3
of people employed in Public Administration and Safety
Transport, Postal & Warehousing
-11.7
fell by nearly 12 000, reflecting the ongoing downward
Public Administration & Safety
-11.7
pressure on public sector employment and wages. as did the number in Transport, postal and warehousing.
Construction
-18.5
-20 -10 0 10 20 Quarterly change in employment (000s) Source: ACTU calculations based on ABS 6202.
Over the year, the Health care and social assistance industry led the pack, adding 54 100 extra employees. Mining was not far behind, with employment up by 53 400 over the year. The number of people employed in mining has grown by around 25% in just one year, without counting any additional employment in related industries.
One of those related industries is Construction, which means it is somewhat surprising that the industry shed
Figure 14: Employment change in the year to the May quarter (thousands) Health Care and Social Assistance
54.1
Mining
53.4
Professional, Scientific and…
47.3
Education and Training
31.1
Agriculture, Forestry and Fishing
23.4
Rental, Hiring and Real Estate…
21.9
Information Media and…
17.3
Other Services
6.8
Electricity, Gas, Water and…
6.8
nearly 50 000 workers over the year to May. The boom
Financial and Insurance Services
4.3
in resources-related construction is clearly not enough to
Public Administration and Safety
1.0
offset the contraction in other parts of that industry.
Manufacturing employment rose slightly in the quarter (based on the ABS trend estimate), but fell over the year
Arts and Recreation Services
-6.2
Wholesale Trade
-6.7
Administrative and Support…
-9.6
Retail Trade
-32.3
by nearly 10 000 people. The Retail Trade and
Accommodation and Food…
hospitality industries also saw reductions in employment
Transport, Postal and…
over the year.
-7.8
Manufacturing
Construction
-36.4 -41.0 -46.8
-60 -40 -20 0 20 40 60 Yearly change in employment (000s) Source: ACTU calculations based on ABS 6202.
ACTU Jobs Report | June 2012
| Page 6
Job vacancies and the employment outlook The number of unemployed people fell by around 8 000
Consumer sentiment remains soft.
between February and March, but the number of job vacancies fell further, down by nearly 10 000 over the
DEEWR has a measure that seeks to forecast the likely
same period. As a result, the number of unemployed
change in cyclical employment over the coming months.
people per job vacancy rose slightly, from 3.46 to 3.61.
The leading indicator fell for the sixth consecutive month
This is still a lower ratio than at any time during the
in June, suggesting that employment is likely to continue
1980s, 90s, or early 2000s.
to grow more slowly than its trend rate.
Figure 15: Unemployed people per job vacancy 7
All of these measures are consistent with the forecasts
6
Statement on Monetary Policy – unemployment is
contained in the latest federal Budget and in the RBA’s
expected to rise by a little in the second half of 2012, to 5
around 5.5%.
4 According to the DEEWR Internet Vacancy Index, 3
vacancies fell over the year in every state and territory
2
other than WA, and in every occupational group.
1
Figure 16: Change in vacancies by occupational group
0 May 02
May 04
May 06
May 08
May 10
-4.1% -6.0% -7.2% -9.4% -10.2% -11.9% -12.0%
May 12
Source: ACTU calculations based on ABS 6202, ABS 6254, ABS 1364.0.15.003.
Private sector vacancies fell by 5.8% over the year, while public sector vacancies fell by 9.2%, a very large reduction.
-16.1%
A fall in vacancies suggests that employers have enough staff to meet their expected demand. Other forward-looking measures also suggest that conditions
-20%
-15% -10% -5% Annual change
Figure 17: Change in vacancies by state/territory
contraction over the year; The DEEWR Internet Vacancy Index fell by 0.7% in May (trend estimated);
The
Dun
and
Bradstreet
employment
expectations index fell by 9.3% over the year;
Western Australia Queensland Northern Territory New South Wales South Australia Victoria Australian Capital Territory Tasmania
6.5%
The ANZ newspaper job ads series showed a
-5.1% -7.9%
1.6% fall in ads in June, and a 17.9%
0%
Source: DEEWR IVI (trend estimate)
are likely to weaken in the coming months:
The Westpac-Melbourne Institute measure of unemployment expectations rose by around
Community and Personal… Technicians and Trades… Machinery Operators and… Sales Workers Managers Professionals Labourers Clerical and Administrative…
-14.6% -15.4% -16.6% -18.6% -19.5% -20%
-10% 0% Annual change
10%
Source: DEEWR IVI (trend estimate)
18% over the year to June; ACTU Jobs Report | June 2012
| Page 7