Employment Market More Subdued in February

The SEEK Employment Index
Following two years of robust growth there was further evidence in February that the Australian employment market is entering a more subdued period.

The SEEK Employment Index (SEI), which measures the ratio of new job ads to job applications, rose by 0.7% in February, indicating that it was slightly more difficult on average for employers to fill vacant positions than it was in January. However, when this is viewed within the context of a 4.9% fall in the past quarter it seems that long term relief may be in sight for staff-strapped employers.

At the State level, however, South Australia is still showing strong signs of labour supply shortages. Supply constraints are still evident in Western Australia, Victoria, NSW and Queensland.

Job Advertisements
New jobs advertised increased by 0.4% in February (seasonally adjusted), maintaining the upward momentum of the last nine months. Although new job ads are 33.0% higher compared to the same time last year, they have risen only 2.8% since November 2007; the smallest quarterly increase in three years.

Across the states, growth in new job ads posted was moderate in South Australia (2.4%), Victoria (1.6%), Queensland (0.8%), NSW (0.4%) and Western Australia (0.4%). Slowing labour demand was evident in ACT (-4.8).

Job Applications
Total applications placed with SEEK in response to new jobs ads fell by 0.3% (seasonally adjusted) last month, following an overall increase in applications of 7.8% in the previous three months.

Commenting on the results, SEEK Sales Director Joe Powell said:

ìThe data for the last three months suggest that the economy may be approaching a turning point. While we expect that the current strong employment market conditions have some way to run, it will be reassuring to employers that the gap between demand and supply may finally be starting to close. We are witnessing strong interest from jobseekers in a wide range of industries spanning everything from banking and finance, to manufacturing, to hospitality and tourism,î he said.

Professor Peter Sheehan of the Centre for Strategic Economic Studies said: ìThe Australian economy continues to be subject to many strong and conflicting forces. Business investment and household disposable income are still strong, and credit is growing rapidly. But the US economy is clearly slowing, the Reserve Bank is increasing interest rates and the Federal Government is flagging a tightening in fiscal policy.

ìBeing a flow measure of new job ads and job applications, the SEEK indicators are well placed to be leading indicators of directional change in the economy.î