NSW leads tightening of the Australian labour market

There was a pronounced tightening in the Australian labour market in November, with a sharp rise in demand for labour and only a modest increase in supply according to SEEK Employment Index data released today.

Developed in consultation with Victoria Universityís Centre for Strategic Economic Studies, the SEEK Employment Index is the first Australian aggregate indicator to directly compare labour market supply with labour market demand.

In November, the number of new job ads posted nationally jumped by 11.8% (seasonally adjusted), to be 32.4% higher than at the same time last year. This was a sharp contrast to October, when the number of new job ads posted fell 5.1%, but consistent with the underlying trend during 2005.

In November supply of labour, which is measured by the total number of applications posted for jobs, recorded a modest increase of 2.6%. However, the number of job applications per new job ad fell by 7.6% (seasonally adjusted), to its lowest level since February 2005.

New South Wales was the stand-out state, recording a bullish 14.7% growth in the number of new job ads, but just a 1% increase in the number of job applications posted.

SEEK Executive Director, Andrew Bassat said that the November data shows the traditional Christmas slow down is no longer a feature for many Australian businesses, but those who are trying to fill positions before the end of the year may find it a challenge.

ìHiring activity has traditionally tapered off in November, but itís clear that this year many businesses arenít prepared to let Christmas get in the way of them securing the new staff they need.

ìOur data show that there are relatively less people applying for relatively more new positions, making it a buyers market for employees who want a new job for Christmas this year.

ìIn particular, New South Wales has had sluggish employment growth for most of the past year, but right now there are plenty of opportunities available and particularly in the services sectorî, he said.

Professor Peter Sheehan, Director of the Centre for Strategic Economic Studies, said that the national accounts released last week showed that, over the past six quarters, real GDP in the core service sectors had increased by 4.1% while that in the goods and goods related service industries rose by only 1.1%.

ìThese core service sectors are strong in New South Wales and Victoria, and the continued buoyancy of these sectors probably explains the tightening jobs position in New South Wales.

îThe underlying strength of the SEEK data is consistent with the rise in employment of 28,000 shown in ABS Labour Force data for November, and suggests that forecasts of falling employment and rising unemployment are mistakenî, he said.