New data shows first indication of slowing labour market

The SEEK Employment Index (SEI) for July, 2006 shows the first real evidence for eighteen months of a slowing in the strong labour markets in the eastern states of Australia, according to data released today.

Nationally, new job ads posted with SEEK (seasonally adjusted) fell by 1.1% for the month, but when viewed in the context of Western Australiaís booming economy falls in several states were higher. The number of the new jobs advertised in Western Australia, rose a further 9.3% in July, and when this was removed from the national figures for the month, the national decline was 2.3%,

Western Australia aside, the only other state to record a rise in new job ads was Victoria (1.2%). There were sharp falls in Queensland and Tasmania (7.4%) and New South Wales (5.2%). Nonetheless, the number of new positions advertised last month remains 24.8% higher than 12 months ago.

Job market supply in Australia continues to remain strong. This is indicated by the number of applications posted for new positions, rising by 1.6% in July 2006 and 20.5% over the past year, and increasing in all states.

As a result, the SEEK Employment Index (the ratio of new ads to applications for those ads, and hence an indicator of demand/supply balance) fell by 4.5% in July 2006, and was 7.6% below the figure for July 2005. Again the exception among the States was Western Australia, where the index rose 1.7% for the month, 24% higher than a year ago.

Commenting on the results, SEEK Joint CEO Paul Bassat said: The job market activity varies considerably between States, particularly when you compare Western Australia and New South Wales. Last month, new ads posted fell by 5.2% in New South Wales while for Western Australia the July, 2006 increase was 9.3%. Applications increased in both states, so that the ratio of ads to applications rose by 1.7% in Western Australia but fell by 8.2% in New South Wales.

This means that while in Western Australia the battle for talent is strong, employers in other states are not facing as much difficulty filling vacant positions with qualified staff,î he said.

Professor Sheehan, Director of the Centre for Strategic Economic Studies said: ìThe Australian economy remains subject to many conflicting forces, ranging from tax cuts and interest rate increases on the policy side to external influences such as the resources boom and higher fuel prices.

How these forces will be resolved remains uncertain. Up to the end of 2005/06 the SEEK indicators have suggested that both labour demand and supply remained strong, and that these conflicting forces were being resolved in favour of a continued sound expansion. The July 2006 data is the first from the SEEK Employment Index to cast doubt on this finding in respect of states other than WA, although it is too early to draw any final conclusion, he said.