Job Market Softens Slightly as Job Seekers Get Active

The SEEK Employment Index
There was a slight softening in the Australian labour market in October although demand for labour remained strong across all states. Jobseeker activity has remained fairly constant since April 2007, but the number of job applications posted rose by 2.5% in October (seasonally adjusted). The increase in applications was evident in all states, but was particularly strong in South Australia.

The SEEK Employment Index, which measures the ratio of new job ads to job applications, fell by 2.8% for the month reflecting the rally in supply alongside continued strong labour market demand. The Index remains 12.3% higher than at this time last year.

At a regional level, the most significant falls in the Index were in South Australia (-6.9%), the ACT (-5.2%) and NSW (-4.6%) meaning that employers in these areas are more likely to have experienced an easier time recruiting staff last month.

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Jobs growth was moderate in October, with new jobs advertised increasing just 1.1% but continuing a strong upward trend observed since February. Western Australia (4.5%) and Queensland (2.4%) continue to stand out, and NSW posted the next highest gain of just 1.1%.

The number of new job ads listed with SEEK has been growing at an annual rate of over 40% per annum, both in the year to October 2007 and over the past four months.

Job Applications
Job seeking activity was the standout feature of the October data. Although the number of job applications posted rose by only 2.5% it was significant following an increase of just 1% overall since April 2007.

All states benefited from increased job application numbers, but market supply was strongest in South Australia.

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

ìOn the face of it an increase in job application numbers might appear positive, but the type of jobs that are attracting the most applications are positions in the hospitality and tourism areas and call centres.

ìMeanwhile we are witnessing national shortages in sectors including construction, law, defence and healthcare.

ìAs a nation, we need to look for ways to redirect people who are having difficulty securing work in one sector, towards areas that are candidate short. In many cases this may mean a considerable investment in education and training, but the benefits to our economy will be long termî, he said.

Professor Peter Sheehan of the Centre for Strategic Economic Studies said: ìWhile strong demand for labour will be moderated somewhat by an improved supply response, this trend is indicative of a pace of demand growth that is not sustainable given the size and skill profile of Australiaís current workforce. Taken in conjunction with other recent data ñ such as the underlying rate of CPI inflation, strong retail sales, credit growth and rising house prices ñ this means that several adjustments to interest rates are likely to be necessary to slow the economy in the coming months.