Demand for labour remains muted in June

The number of job advertisements in major metropolitan newspapers fell by 3.2% in June to an average of 20,167 per week, following a 7.7% rise in May. Newspaper advertisements are now 2.7% lower than in June 2005.

The decline in newspaper job advertisements in June was driven by falls in all states. Job advertising dropped by 6.5% in Queensland; by 4.4% in Tasmania; by 3.8% in Western Australia; by 3.6% in the ACT; by 2.8% in New South Wales; by 1.8% in South Australia; by 1.5% in Victoria; and by 0.2% in the Northern Territory.

Abstracting from month-to-month volatility in the data, trend job advertisements were broadly unchanged in June, and were 3.7% lower than a year earlier. The number of internet job advertisements rose by 4.1% in June to average 162,878 per week. This followed a fall of 2.6% in May. The trend rate of growth in internet job advertisements continued to slow, with an increase of only 0.6% in the month.

The total number of job advertisements increased by 3.2% in June to average 183,044 per week. The trend rate of growth of total job advertisements also continued to slow to a monthly increase of only 0.6%.

ANZ Head of Australian Economics, Mr Tony Pearson, said: Trend data continue to provide the most reliable guide to the underlying demand for labour. They suggest that the demand for labour in June was muted, continuing the generally softer story that has been evident in the first half of 2006. In terms of the mediums used by employers to advertise positions, there are now tentative signs of a pick up in newspapers, while trend growth in internet advertisements continues to slow.î

He added: ìThe advertisements series continues to be a good leading indicator of trend movements in employment. Employment growth accelerated in the first three months of this year, in line with a pick up in trend growth in total job advertisements in late 2005.

ìHowever, the slowing in trend growth in job advertisements through the first half of 2006 suggests employment growth will ease over the next three months. The unemployment rate fell to a three decade low of 4.9% (seasonally adjusted) in May, which was an outstanding achievement.

However, should employment growth slow over the next few months as we expect, the unemployment rate is unlikely to remain this low. This was the first full month following the May interest rate rise, but it is still a little early for that to have impacted on employersí hiring intentions.

The newspaper job advertisements series shows that there continue to be significant differences in the demand for labour between the states. Conditions remain the most buoyant in Western Australia, and are also solid in the Northern Territory and in the Australian Capital Territory.

ìTasmania seems to have turned a corner, with a gentle trend rise over the past few months. Demand for labour appears to be falling fastest in Queensland, which is something of a surprise given the generally buoyant economic conditions in that state, and is also still declining in South Australia, albeit to a lesser degree. Employment activity might now be stabilising in New South Wales and Victoria following an extended period of weakness, Mr Pearson said.