Employment Market Conditions Soften in June

The SEEK Employment Index
A consistent picture of softening employment conditions emerged in June as increases in job applications outweighed growth in new jobs in all States.

As a result, the SEEK Employment index fell by 2.4% (seasonally adjusted) nationally to be 3.4% higher than 12 months ago. This supports Job Vacancy and Labour Force data from the Australian Bureau of Statistics that point to more modest growth in job vacancies and an increase in the number of people participating in the workforce respectively.

SEEKís data suggests that labour market softening was most apparent in the ACT where the Employment Index fell by 8.3%, followed by South Australia (3.1%) and Queensland (2.4%). The Employment Index for Western Australia fell by 1.6% to its lowest level since July 2006.

Job Advertisements
There was a 2.2% (seasonally adjusted) increase in job advertisements posted nationally in June, continuing the upward trend. The ACT experienced the most significant jobs growth with a 10.4% jump in new positions advertised, with South Australia (4.7%) and Queensland (3.3%) the next most buoyant markets. Over the year to June new job ads have increased by a significant 36.3%.

Job Applications
In welcome news for employers and the economy, job seekers returned to the market, resulting in a 4.6% spike in job applications submitted during June. The strongest activity was in Western Australia, which experienced a 4.5% increase in job applications, as well as the ACT.

Commenting on the results, SEEK Sales Director Joe Powell said that a closer look at employment market activity by industry suggests that it lags significantly behind the real-time needs of the market.

ìThere is evidence that in many industry sectors, employers are delaying recruiting staff until they have an immediate need, rather than anticipating the capacity and skills they will need in the future.

ìThe most in-demand employees in June were superannuation and insurance brokers, probably because firms have been struggling with serving the many customers who wished to take advantage of the favourable tax treatment given to lump sum superannuation contributions made by the end of the financial year.

ìIn Western Australia, where the resources boom has dominated the economy for the past 18 months, drilling positions in the mining, oil and gas sector were the second most applied for jobs in June. This illustrates that in the current market, business cannot rely on skilled recruits being immediately available. Where there is not enough skilled labour to meet demand, there can often be a long delay before this imbalance corrects.

ìEmployers that work on a longer planning horizon and recruit in anticipation of their needs will enjoy a significant competitive advantage in a skills short employment marketî, he said.

Professor Peter Sheehan of the Centre for Strategic Economic Studies said: ìA combination of data from the Reserve Bank and the Australian Bureau of Statistics support that the labour market is easing as workforce participation rates increase. In particular a strong labour supply response in Western Australia and Queensland is a promising sign that those economies are becoming better equipped to manage the continuing resources boomî, he said.