No Signs of a Slowing Australian Job Market

The Australian labour market is experiencing continued buoyancy, characterised by high demand for candidates, according to SEEK Employment Index data released today.

SEEKís findings support the latest ABS Labour Force data which showed that 25,900 new jobs were created in February. They do, however, contrast with data released earlier this month which paint a subdued picture of the employment market, based on newspaper job advertisements being at their lowest level since April 2003 (Source: ANZ Job Advertisement Series, 6 March 2006).

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.

Data for February showed continuing strength in the number of new jobs posted, with an increase for the month of 0.6% in seasonally adjusted terms. Increases in new jobs were experienced in Western Australia (5.9%), South Australia (5.4%), Queensland (3.0%) and Victoria (1.2%). New South Wales bucked the trend with a 1.5% fall in the number of jobs advertised between January and February.

Overall, the number of jobs posted in February 2006 was 39.3% higher than in February 2005 and 20.1% higher than in October 2005, after adjustment for seasonal factors.

In contrast, the number of job applications posted in February fell 8.6% from Januaryís very high levels, but remained 28.9% higher than at the same time last year. This high level of job searching activity by Australian jobseekers also resulted in a record number of 1.97 million people visiting the SEEK website during the month (Source: Nielsen Net Ratings).

Reflecting labour demand and supply for the month, the SEEK Employment Indicator ñ the ratio of new job ads to applications for those jobs ñ rose by 7.1% in February 2006, fully offsetting the fall in January 2006. This means it was relatively more difficult for employers to fill positions than it was in the previous month.

SEEK Joint CEO, Paul Bassat, said recent pessimism among some economic commentators about the health of the labour market was not justified by SEEKís data.

ìOver the past decade, there has been a significant and continuing shift among employers and recruiters towards advertising on the Internet, and the majority of Australian jobseekers now prefer looking for jobs online.

ìBecause of these changes in behaviour and the ability for online job boards to track application volumes, for the first time, we can measure supply and demand in tandem. This is providing the whole story and a clearer picture of labour market activity, involving both employers and jobseekers.

ìEconomic indicators reliant on using employment advertising in newspapers as a barometer of the labour market are no longer providing an accurate picture. Itís the equivalent of referring to VHS tape sales as the indicator of home entertainment film sales, when we all know people now clearly prefer DVDs.î

Paul Bassat added that hot spots in the market are also being identified through the data: ìLooking across the market, new job ads posted in the services industries remain strong, especially in the business and property sectors. And ads for engineering and construction jobs related to infrastructure projects have grown particularly rapidly over the past 12 monthsî, he said.

Professor Peter Sheehan, Director of the Centre for Strategic Economic Studies said: ìThere is no sign in these data of a slowing Australian job market, as is suggested by some other indicators.

ìIndeed, the 20% rise in seasonally adjusted jobs ads since October 2005 suggests that demand for labour remains strong in many sectors. If anything, we expect a further tightening of the labour market during 2006î, he said.