Australian Employment Market Update
- Unemployment rate remained steady at 5.4%.
- Full-time employment increased 41,200 to 8,565,200
- Monthly hours worked in all jobs increased 10.7 million hours (0.6%) to 1,750.7 million hours
The Australian Bureau of Statistics released the latest employment figures today which show that the Australian labour market gained some strength after several months of poor results. Overall employment growth was stronger with a robust increase in full-time employment, although the overall increase in monthly hours worked was modest.
By Bill Mitchell
Unemployment fell marginally with the unemployment rate steady at 5.4 per cent. However, participation rose by 0.2 per cent and employment growth was strong enough to absorb both the underlying population growth and the new entrants into the labour force.
Employment growth – much stronger in June
Employment growth was stronger in July after a several months of mediocrity.
Employment rose by 50,900 with full-time employment increasing by 41,200 and part-time employment increasing 9,700.
The following graph shows the month by month growth in full-time (blue columns), part-time (grey columns) and total employment (green line) for the 24 months to June 2018 using seasonally adjusted data.
It gives you a good impression of just how flat employment growth had been leading into 2017.
Overall: today’s result signals a stronger labour market.
Whether that is the start of a stronger trend will be revealed in the next few months.
The following table provides an accounting summary of the labour market performance over the last six months. The monthly data is highly variable so this Table provides a longer view which allows for a better assessment of the trends.
Overall there have been 116.8 thousand jobs (net) added in Australia over the last six months while the labour force has increased by 99.4 thousand. The result has been that unemployment has fallen by 17.4 thousand.
These aggregate changes signify a modest labour market performance at best.
Given the variation in the labour force estimates, it is sometimes useful to examine the Employment-to-Population ratio (%) because the underlying population estimates (denominator) are less cyclical and subject to variation than the labour force estimates. This is an alternative measure of the robustness of activity to the unemployment rate, which is sensitive to those labour force swings.
The following graph shows the Employment-to-Population ratio, since February 2008 (the low-point unemployment rate of the last cycle).
It dived with the onset of the GFC, recovered under the boost provided by the fiscal stimulus packages but then went backwards again as the last Federal government imposed fiscal austerity.
The ratio began rising in December 2014 which suggested to some that the labour market had bottomed out and would improve slowly as long as there are no major policy contractions or cuts in private capital formation.
The series turned again as overall economic activity weakened.
The ratio rose by 0.1 points in June 2018 to 62.1 per cent and remains well below pre-GFC peak in April 2008 of 62.9 per cent.
To put the current monthly performance into perspective, the following graph shows the average monthly employment change for the calendar years from 2005 to 2018 (the 2018 result is up to June only).
It is clear that after some lean years, 2017 was a much stronger year if total employment is the indicator.
It is also clear that the labour market has weakened considerably in the first six months of 2018.
To provide a longer perspective, the following graphs shows the average monthly changes in Total employment (upper panel), and Full-time and Part-time employment (lower panel) in thousands since 1978 (when the current dataset began).
The 2018 average is up to June only so is not definitive.
The interesting result is that during recessions or slow-downs, it is full-time employment that takes the bulk of the adjustment. Even when full-time employment growth is negative, part-time employment usually continues to grow.
Unemployment decreased 1,100 to 714,100
The official unemployment rate remained steady at 5.4 per cent in June 2018 because employment growth was able to match the underlying population growth and the rising participation rate.
The following graph shows the national unemployment rate from February 1978 to June 2018. The longer time-series helps frame some perspective to what is happening at present.
After falling steadily as the fiscal stimulus pushed growth along, the unemployment rate slowly trended up for some months.
It is still 0.5 points above the level it fell to as a result of the fiscal stimulus and 1.4 points above the level reached before the GFC began.
Conclusion: there is still considerable slack in the labour market that should be absorbed with fiscal stimulus.
Hours worked – increased by 10.7 million hours (0.62 per cent).
The following graph shows the monthly growth (in per cent) over the last 24 months.
The dark linear line is a simple regression trend of the monthly change – which depicts a fairly flat trend – distorted somewhat by the outlier in May 2017 (the trend would have been more sharply downward without that positive spike).
You can see the pattern of the change in working hours is also portrayed in the employment graph – zig-zagging across the zero growth line although less so in 2017.
SEEK reveals Australia’s top 20 highest paying industries
Written by SEEK Employment Reports
SEEK, Australia’s number one employment marketplace, announces Australia’s highest paying industries and jobs across the country.
The data which ranks the average advertised salaries across 28 industries, reveals Mining, Resources & Energy as the industry to be the most lucrative for Australian workers. The data shows the highest average advertised salary across the country for this industry is $116,108 per annum. This sector has consistently been a top performer in the salary stakes, topping SEEK’s Annual Salary ranking as the highest paying industry for the sixth year running.
The top 5 paying industries with the highest average advertised salary:
- Mining, Resources & Energy: $116,108
- Consulting & Strategy: $110,045
- Construction: $109,325
- Engineering: $105,810
- Information & Communication Technology: $104,874
The industries with the lowest average advertise salaries:
- Sport & Recreation: $65,900
- Hospitality & Tourism: $61,944
- Retail & Consumer Products: $60,704
- Call Centre & Customer Service: $58,942
- Administration & Office Support: $58,671
Kendra Banks, Managing Director of SEEK ANZ, said: “With recent reports showing confidence slowly returning to the sector, it’s no surprise that Mining, Resources & Energy salaries are managing to maintain the top spot in this year’s SEEK Annual Salary rankings. Despite this ranking, average advertised salaries are well below the level they were at five years ago, with the sector posting the biggest decline in average advertised salaries over the last five years and many of the major mining roles absent from the list of top salaries.”
The industries with the greatest change in average advertised salary over a five year period are:
Most significant increase in salary:
- Education & Training: 19.15%
- Community Services & Development: 16.06%
- Design & Architecture: 15.78%
- Administration & Office Support: 13.64%
- Real Estate & Property: 13.60 %
Most significant decrease in salary:
- Mining, Resources & Energy: -13.96%
- Engineering: -6.91%
- Manufacturing, Transport & Logistics: -2.27%
- Construction: -1.77%
- Science & Technology -0.94%
Looking at Australia’s top 20 highest paying jobs over the last five years, there has been a notable shift in the industries that dominate the rankings.
In 2013, Mining, Resources & Energy dominated the rankings, offering 13 of the top 20 highest paying jobs. This figure has dropped significantly to just two salaries in the top 20 in 2018. Today, the Information & Communication Technology (ICT) industry dominates, with salaries from six roles within the industry featuring in the top 20.
The top five highest salaries in 2018 are as follows:
- Information & Communication Technology – Architects: $138,144
- Engineering – Management: $133,927
- Information & Communication Technology Management: $132,307
- Mining, Resources & Energy – Management: $131,462
- Legal – Generalists, In-house: $128,988
ICT is performing strongly, growing by 7.3%, with the average salary climbing from $97,700 to $104,800 in five years.
The top paying ICT jobs are:
- Information & Communication Technology – Architects: $138,144
- Information & Communication Technology – Management: $132,307
- Information & Communication Technology – Security: $122,753
- Information & Communication Technology – Product Management & Development: $120,740
- Information & Communication Technology – Product Management & Development: $120,554
- Information & Communication Technology – Team Leaders: $ 119,078
Kendra Banks, Managing Director at SEEK ANZ said: “What we are seeing is that candidates in information and communication technology are more motivated by salary and compensation than those in any other industry. Other factors that are of importance when considering roles within ICT are work-life balance and career development opportunities. We expect to see salaries for ICT roles continue to strengthen across every sector in the coming years.”
Table 1. Salary movements across a 5 year period