Strong Australian Labour Market Continues

The Australian labour market continued to grow in strength in March, with an increase in both job seeking activity and the number of new positions being advertised, according to SEEK Employment Index data released today.

When combined with an unemployment rate that fell to five per cent (seasonally adjusted) in March to match the record lows of mid-2005 (Source: ABS data), the findings suggest that skilled job seekers will continue to benefit from a tightening market this year.

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 March, the number of new job ads posted rose by 2.4% (seasonally adjusted), with increases recorded in all states and territories, except the ACT. Victoria led the pack with a 5.2% increase, suggesting that the Commonwealth Games impacted recruitment activity.

Job seeking activity also increased in March, with an increase of 3.6% in the number of applications posted, and a record 2.09 million unique visitors to www.seek.com.au for the month (Source: Nielsen/Net Ratings). The number of job applications received in March stand 28.5% higher than at the same time last year.

Looking at job market demand and supply in tandem, the SEEK Employment Index which measures the ratio of new job ads to applications for those jobs, fell 3.7% from 109.5 in February to 105.4 in March. This means that jobseekers faced fewer opportunities and increased competition for positions in March. However, the Index remains steady with same time last year when it was 105.5.

SEEK Joint CEO, Paul Bassat, said that there was plenty of cause for ongoing optimism regarding the state of the labour market in Australia.

ìUnemployment is low and the number of jobs on offer continues to grow, but the good news is that labour supply is also strong. Employers experienced a jump in applications received in March, particularly in Victoria and Queensland where job applications increased by 3.7% and 4% respectively.

ìLooking at where the hot spots are, job growth over the past 12 months has been most pronounced in Western Australia (66%) and Queensland (67.6%). They are followed by South Australia with 46.5% growth in the past 12 months and Victoria at 39.1%.

ìUnlike a number of employment indicators, the SEEK Employment Index data is consistent with the recent findings of the ABS in relation to labour market activity in Australia. It is likely that that a high proportion of those applying for jobs are people who are already labour force participants.

ìOur mobile workforce is a blessing and a curse for Australian employers. There are people out there who are willing to switch organisations for the right job, but the downside is they will be just as willing to switch again,î Mr Bassat said.

Professor Peter Sheehan, Director of the Centre for Strategic Economic Studies said: ìThe stronger trends seen in the demand for labour are consistent with other economic indicators that showed stronger growth in retail sales, continuing strong business investment and strong credit growth.

ìWhile the overall balance between supply and demand for labour remains sound, except for some particular labour shortages, the labour market is likely to tighten further during 2006.

ìThis could lead to pressure on interest rates if signs of higher inflation emerge, however, with global forces continuing to hold back inflation around the world, low inflation may continue in Australia for some time to comeî, he said.