ANZ Job Ads over the past 10 years

This is the sixth consecutive monthly rise in Australian job advertisements monitored by the ANZ bank for their Job Advertisements Series.

Commenting on the figures, ANZ Head of Australian Economics Ivan Colhoun said:

The medium-term outlook for labour demand remains positive. In particular, with economic growth expected to accelerate strongly in 2011-12, labour market conditions will remain generally favourable with the unemployment rate expected to push towards 4.75% and wage pressures to lift modestly.

The total number of job advertisements remains 35.6% below the all-time peak of 278,000 job ads a week reached in April 2008.

The money will be created at a rate of about $75 billion per month. This represents over US$500 created a month for each American taxpayer.

Meanwhile, continued growth in the Australian economy means the Australian Central Bank is undertaking “reverse Quantitative Easing,” increasing the cost of money by hiking interest rates this week again to 4.75%

The Australian dollar is trading at its highest level against the US since it floated in 1983.

Prime Minister Julia Gillard saw both advantages and drawbacks coming from the rising Aussie dollar.

“It’s good for some industries and bad for others,” she told Nine Network.

“If you rely on imported components to do what you do, then it makes a good difference. But if you’re competing for things like tourism, international education, it makes it really tough.”

For example, the cost of education for Chinese students in Australia has risen 50 per cent compared with the start of 2009.

Currently 130,000 Chinese students are in Australia, making up 25 one quarter of of the country’s international students.

One of the main results of the Fed’s previous money printing adventures has been to drive up the price of commodities, which benefits Australia’s commodity exports.

Australian Employment
Total Jobs in Australia

Australia’s migrants are still enjoying better prospects than jobseekers in most other developed countries.

This month’s job ad figures from the ANZ bank are up by a third compared with the same time last year.

In actual figures, this translates to weekly job ads (seasonally adjusted) running at 177,380 in September 2010 compared with 139,829 in September 2009.

Putting this in a context of all time highs and lows, there were 278,609 job ads per week at the economic peak in April 2008 and 125,258 job ads per week when ads bottomed out in July 2009.

September’s actual employment figures are also encouraging, with the unemployment rate falling to 5.1%. In the last year, the Australian economy has created over a third of a million net new jobs.

Australia's Unemployment Rate

ANZ Chief Economist Warren Hogan said:

“This is the fifth consecutive monthly rise in job advertisements, although we note that the pace of growth is now easing.

“Hiring intentions of Australian businesses are solid and that further falls in the unemployment rate are in prospect. We expect solid employment growth, of an average of 20,000 per month, in the short-term.

“Continued growth in job advertisements over September increases the likelihood that the unemployment rate will fall below 5% by year-end. This will see skills shortages emerge and will put upward pressure on wages growth.”

The figures for June this year are considerably better than at the same time in 2009, with a 30.2% increase in total job ads in June 2010 compared with June 2009.

In June 2010, total job ads grew by 1.8% compared with May.

Similarly, the Australian Bureau of Statistics reported the number of people in employment increased by 45,900 (seasonally adjusted) in June 2010.

Actual weekly job ads (seasonally adjusted) were 169,690 in June 2010 compared with 126,028 in June 2009.

To see how this fits in an overall boom and bust scale, there were 278,609 job ads per week at the peak in April 2008 and 125,258 job ads per week when ads bottomed out in July 2009.

The rise in total job ads came purely from a 3% increase in internet job ads. The number of newspaper job ads fell 1.6% from May.

Internet job ads have increased by 33.6% since June 2009 and are growing at their fastest yearly rate since January 2008.

ANZ Chief Economist Warren Hogan said:

“Job advertisements rose strongly again in June after a similarly strong rise in May. This suggests that employers remain confident about Australia’s economic prospects, despite escalating concerns about the global environment.

“Despite the strong rise in total job advertising, the slowdown in newspaper job advertising growth does imply some impending moderation in Australia’s recent strong employment growth.”

The survey of over 2,200 Australian employers indicates hiring intentions will continue to improve for the next three months. The seasonally adjusted Net Employment Outlook is at +24%, a 2 percentage point improvement from the last quarter.

The survey results reveal Australian job prospects are among the strongest in the world, behind India, Brazil, Taiwan, China and Peru. Australia’s salaries are, on average, considerably higher than in any of these countries.

“The recovery has definitely hit the jobs market, with the employment outlook at its strongest point in two years. This is good news for job seekers, and the Australian economy,” said Mr. Lincoln Crawley, Managing Director, Manpower Australia & New Zealand.

According to Mr. Crawley, the job market across all industries has returned to pre-downturn levels, but is growing at a manageable pace.

“Movements in employment levels are becoming less volatile as the market returns to normal hiring patterns. The recovery pace is looking steady, but job seekers and employers alike need to be patient. It’s not going to be a quick return to boom times, and in any case, we wouldn’t want things to ramp up too quickly – no one wants to see a wages breakout that could push up inflation and interest rates,” said Mr Crawley.

Across industry sectors, the Transport & Utilities sector is set for significant growth, at +33% compared to +14% last quarter. Both the Mining & Construction sector (+31%, up from +27% last quarter) and Finance, Insurance & Real Estate sectors (+28%, up from +23% in Q2) have also seen notable growth in employer hiring optimism.

According to Mr Crawley the Australian economy has fared well in the global financial crisis, and now appears to be one of the most secure in recovery, compared to other regions of the world, due in large part to the natural resources boom.

“The strength of the labour market is always going to be varied across the country, with Western Australia employers currently buoyed by mining and construction activities in the area. However, we are noticing some evidence of a two-speed economy, with some states returning to pre-crisis levels faster than others,” he said.

“It is now essential to ensure skills shortages in the mining and resources sector don’t hinder the country’s renewed growth,” he said.

The ANZ bank monitors the number of job ads appearing each week in Australian newspapers and on Australian internet job sites.

This month’s figures show a significant improvement on the same time last year, with a 14.9% increase in job ads in April 2010 relative to April 2009.

Actual weekly job ads (seasonally adjusted) were 160,660 in April 2010 compared with 139,829 in April 2009.

To see how this fits in an overall boom and bust scale, there were 278,609 job ads per week at the peak in April 2008 and 125,258 job ads per week when ads bottomed out in July 2009.

In this context, job ads in Australia are showing modest growth but are a long way from levels seen in the boom days.

ANZ Chief Economist Warren Hogan said:

“Solid momentum in job vacancies, combined with other forward looking indicators of labour demand, point to further employment growth through 2010. This is consistent with the broader outlook for the Australian economy. A substantial investment pipeline should underpin firm job growth. Moreover, the Australian economy is receiving a sizable boost to national income from a sharp uplift in the terms of trade amid voracious demand for commodities from emerging markets.”

“Total employment in the Australian economy reached a record 11 million in March 2010 (+2.1% YoY). Over the past six months the balance of job growth has shifted toward more full-time employment. This is a possible indication that employers are gaining confidence that the recovery in the Australian economy is getting traction.”

Australia’s seasonally adjusted unemployment rate fell from 5.6% in November to 5.5% in December, a better performance than other advanced economies.

International Unemployment Rates

• Australia 5.5%

• New Zealand 6.5%

• UK 7.9%

• Canada 8.5%

• USA 10.0%

Employment

The number of employed people rose by 35,200 in December.

ABS Graph: The Number of People Employed in Australia, December 2009

• 7,300 of the jobs were full-time and 27,900 were part-time.

• There are now 10.906 million people employed in Australia

• The number of people employed in Australia has been growing now for four months.

• The negative effects of the global economic downturn have been less evident in Australia than in many other economies.

Australian State Unemployment

The unemployment rate fell in all of Australia’s states.

ABS Graph: Australian Unemployment Rate, December 2009

• New South Wales’ rate fell to 5.9% in December from 6% in November.

• Victoria’s fell to 5.2% from 5.4%.

• Queensland’s fell to 5.9% from 6.1%

• Western Australia’s fell to 5.1% from 5.2%

• South Australia’s fell to 5.3% from 5.5%

These latest unemployment figures reinforce the most recent recruitment advertising data from the ANZ bank showing Australian job prospects are improving.

• Newspaper job ads rose by 11.6% in December 2009, while internet job ads rose by 5.6% compared with the previous month.
• Total job advertisements experienced their strongest monthly growth rate since May 2007, but the level of total job ads remains 22.6% lower than a year ago.
• Total job advertisements are now 19.1% higher than the cyclical trough recorded in July 2009, but they remain 22.6% lower than in December 2008.
• Newspaper job ads averaged 10,631 per week in December, up from 10,140 12 months ago.
• Internet job ads averaged 138,432 per week, down from 182,361 12 months ago.
• The total average number of weekly job ads in December was 149,063, down from 192,501 a year ago.
• Two years ago, total weekly jobs ads averaged 274,703.
• Job ad levels have been stable/rising for ten months, indicating that businesses may no longer be cutting back hiring intentions as earlier in the year.

Commenting on the latest figures, ANZ Head of Australian Economics Warren Hogan, said:

“Total job advertisements are now well past the low reached in July 2009 and are continuing to improve month on month.

“As of November, total employment in the Australian economy was already at a record high, of 10.898 million jobs (+0.6% YoY). A substantial 99.5k jobs were added to the labour market in just the last three months, 71k of them full-time.

“In the near term, the forward indicators appear positive for some solid employment growth in December and over the summer months, although probably at a slower pace than seen in the past three months.”

Meanwhile, the number of people employed increased by 24,500 the ABS has reported – most financial commentators had expected a fall.

Unemployment rose because the number of people looking for work rose faster than new jobs were created.

The rise in employment was driven by an increase in part-time employment, up 21,500 to 3.241 million.

Full-time employment increased 2,900 to 7.591 million persons.

The number of people unemployed increased by 11,100 in October to reach 670,100, the highest level since January 2002.

The ABS seasonally adjusted monthly aggregate hours worked series fell in October, down 1.9 million hours (to 1,521.1 million hours) from September.

Regional Employment

Not all states reported job gains:

Queensland: unemployment fell from 6.3 % to 6.0 %.
New South Wales: unemployment rose from 5.5 % to 6.1 %.
Victoria: unemployment unchanged at 5.7 %.
South Australia: unemployment fell from 5.7 % to 5.3 %.
Western Australia: unemployment fell from 5.7 % to 5.0 %.
Tasmania: unemployment unchanged at 5.4 %.

Interest Rates Up, Dollar Up

The Reserve Bank has raised interest rates twice in the last two months. Today’s better than expected employment news makes it more likely interest rates will be raised again. The Australian dollar rose strongly today in anticipation of a further interest rate rise.

• Newspaper job ads averaged 8,800 per week in October, down from 13,294 12 months ago.
• Internet job ads averaged 124,909 per week, down from about 218,280 12 months ago.
• The total average number of weekly job ads in October was 133,709, down from 231,574 a year ago.
• Two years ago, total weekly jobs ads averaged 256,975.
• Job ad levels have been stable for seven months, indicating that businesses may no longer be cutting back hiring intentions as earlier in the year.

Commenting on the latest figures, ANZ Head of Australian Economics Warren Hogan, said:

“After two months of growth, job advertisements fell by 1.7% in October. As an indicator of underlying economic conditions, these results highlight that the recovery of the Australian economy is still vulnerable to set backs. Indeed, job advertising in newspapers remains less than half of the recent cyclical peak.

“So far in this downturn, the Australian labour market has been characterised by cuts to hours that have meant fewer cuts to employment, and resulted in rising underemployment rather than rising unemployment.

“In the near term, we do not expect to see much improvement in the official labour market statistics. Trends in job advertising tend to lead actual employment outcomes by around six to nine months. As such, we expect broadly flat employment growth over the course of the summer with a further small increase in the national unemployment rate to just above 6.5% in mid-2010.”