Employment Market Strengthens in September

Competition for new jobs decreased slightly in September, but employment market supply and demand remains strong, adding to conflicting information about the state of the Australian economy.



The number of new job ads posted in September increased by 2.7% (seasonally adjusted), on top of a significant gain of 10.5% in August. New jobs posted in September stand 36.2% higher than at the same time last year, according to the latest SEEK Employment (SEEK EI) figures released today.

On the supply side, applications for jobs advertised are 40% higher than a year ago, but down 2.5% in September. NSW and South Australia were the only two states to buck the trend and record an increase in the number of job applications of 1.3% and 19.8% respectively.

Looking at job supply and demand for labour in tandem, the SEEK EI rebounded strongly in September, rising 6.8 points to 105.4, 11.4 points higher than the same time last year. This indicates that the labour market tightened last month to its strongest level since March 2005.

SEEK CEO Paul Bassat said that while this is a clear indication that the labour market is tightening, more time is needed before the extent of this is known.

ìOn average, employers had slightly fewer applications for each job they advertised in September, but the numbers of new jobs available and the number of Australians who are on the lookout remain very high.

ìWith plenty of employment opportunities available, job seekers are beginning to become more selective about the positions they apply for and companies will need to differentiate themselves as they compete for new staff.

ìIn the year to September 2005, the strongest growth in new job ads has come from the resource rich states of Queensland (53.6% increase in the year) and Western Australia (59.1% increase in the year). New South Wales has been the weakest state in terms of job ad and employment growth in recent years, but it is redeeming itself with a 7.9% increase in new job ads since June 2005.

ìIn South Australia job ads are down slightly, and competition for new positions is intensifying, as shown by a 19.8% increase in the number of applications received per job advertisement in September, suggesting a weakening of the employment market in South Australiaî, he said.

Professor Peter Sheehan, Director of the Centre for Strategic Economic Studies, said that the outlook for the Australian economy remains unclear as the SEEK Employment Index adds to a mix of conflicting signals.

ìThe continued rapid expansion of credit, the resources boom and increasing growth in employment and wages suggest that the long expansion is continuing. Meanwhile, factors such as weaker GDP growth, a slowing housing sector, and the impact of rising fuel prices suggest that the impetus may be slowing.

ìBased on the SEEK Employment indicators, the balance appears to be turning towards further reductions in unemployment. With the 5% barrier likely to be breached and some increased inflationary pressures, it is now more likely that the next interest rate change will be up rather than downî, Professor Peter Sheehan said.