Australian Labour Market Continues To Grow

There were just 17 working days in April, but the Australian labour market remained strong, with an increase in the number of new positions advertised and only a slight drop in job seeking activity, according to the SEEK Employment Index data released today.

The SEEK Employment Index data for April substantiates the trend to a tightening labour market that has been evident since late 2005. The number of new jobs advertised in April was 20% higher than six months ago, and job applications per ad fell slightly by 0.9% after a period of stabilisation.

Developed in consultation with Victoria Universityís Centre for Strategic Economic Studies, the SEEK Employment Index is the first Australian aggregate indicator to directly compare labour market supply with labour market demand.

In April, the number of new job ads posted rose by 3.0% (seasonally adjusted), with increases recorded in all states and territories. Queensland experienced the largest increase among the mainland states with 1.8%, but South Australia (1.6%) and the other states were close behind.

Job seeking activity decreased slightly in April by 0.9% but remains 19.3% higher than 12 months ago. Employers in Queensland and Western Australia would have experienced the most trouble hiring new staff, with applications for jobs declining 5.3% and 4.5% respectively, last month.

Looking at job market demand and supply in tandem, the SEEK Employment Index which measures the ratio of new job ads to applications for those jobs, rose by 4.1% to 110.4 after a 1% drop in March. The SEEK Employment Index is now 8.7% higher than six months ago, indicating that growing demand (new job ads) and stabilised supply (number of applications per ad) are combining to create further tightening in the Australian labour market.

However, SEEK Joint CEO, Paul Bassat, said it is premature to conclude that critical staff shortages are looming based on the slight drop in applications per ad in April.

ìWith school holidays and three public holidays in April, many people extended their Easter break until ANZAC day, so it figures that less people were looking and applying for new jobs. Adequately adjusting for these factors by seasonal adjustment is always difficult, and we will get a clearer picture over the next couple of months about how significant any supply side contraction might be.

ìWhat we do know is that a number of industry sectors are booming. New job ads in construction and engineering are 49.1% higher than 12 months ago, strongly reflecting the mining boom and growth in Queensland and Western Australia, which has required new infrastructure to cope with the influx of people from interstate.

ìInformation technology and telecommunications growth is also strong, with new job ads 29.3% higher than 12 months ago,î Mr Bassat said.

Professor Peter Sheehan, Director of the Centre for Strategic Economic Studies reiterated that April is a difficult month for interpreting economic data. ìWith Easter, ANZAC Day and four full weekends falling within a 30 day month drawing solid conclusions about labour market activity is challenging.

ìNevertheless, these data imply that the labour market tightened further in April, ahead of the interest rate rise and the expansionary Federal budget. It will be interesting to observe how these conflicting forces impact over the next few months on employer demand for new staff, particularly in those states that arenít riding on the back of the resources boomî, he said.