Job postings fall again but rate of decline slows

Executive summary

  • The Australian employment market continues in its downward trajectory. In the first quarter of 2024 the Australian Jobs Index slipped a further 4.6%.

  • This is the fourth consecutive fall. The cumulative decline over twelve months is now 22.1%.

  • The rate of decline is slowing but we expect the jobs market to remain soft until interest rates fall and business confidence returns.

  • In the last quarter Flexible job vacancies (e.g. casual, temporary and fixed term contract) fell 14.7%, while Permanent roles fell just 1.4%.

  • The weakest sectors were Public Administration, down 10.6% and Health Care, down 10.4%. Both sectors previously drove much of the strength in the employment market post Covid.

  • Education and Training has been one of the stronger sectors, rising in late 2023 as the tertiary sector expanded once more with the return of overseas students.

  • Mining, Construction and Utilities rose 3.9%. All face challenges in the months ahead, not least the Mining and Resources where falls commodity prices will inevitably flow through to reduced job opportunities.

  • Every professional occupational group fell in the March quarter. The only (relatively) bright spot is Technology Professionals which fell just 0.7% halting the massive decline reported in Q4 2023.

  • There were substantial declines across Service and Community, Sales Workers and Labourers, Drivers and Operators. These all point to continued fragility in employment markets.

  • The situation has gone from bad to worse in NSW with a further decline of 10.5% in the states job advertising volumes. Year-on-year decline of 30.2% is the worst of all states and territories.

  • Victoria fared better this quarter slipping just 4.8% but this is the fourth successive quarterly decline.

  • There are more positive stories in less populous states. Western Australia, Tasmania, South Australia and the Northern Territories all enjoyed increases in job opportunities in the last three months.

Australian Jobs Index

Chart 1: Australian jobs index (seasonally adjusted)

Job Type Analysis

  • The Australian employment market continues in its downward trajectory. In the first quarter of 2024 the Australian Jobs Index slipped a further 4.6%. This is the fourth consecutive fall. The cumulative decline over twelve months is now 22.1%. Vacancies were actually at record high levels in the first quarter of 2023 but have
  • The only positive conclusion from this quarters decline is that the rate of decline has decreased. The ongoing contraction in the jobs market was widely anticipated. Successive interest rate rises, high inflation and a fragile global geopolitical landscape have combined to hurt business confidence.
  • Last month’s fall in unemployment from 4.1% to 3.7% complicates matters. This was not expected by economists. Job vacancies are a lead indicator of unemployment. The trend was clearly down. Unemployment was expected to continue to rise. Whilst welcomed by the Federal Government this could well prove to be a statistical aberration. It also complicates the decision as to when the RBA will lower interest rates. It was “targeting” an unemployment rate of 4.5%!
  • We expect the jobs market to remain soft until interest rates fall and business confidence returns.
  • The change in Job Type is also unusual. In the last quarter Flexible job vacancies (e.g. casual, temporary and fixed term contract) fell 14.7% while Permanent roles fell just 1.4%. The longer-term picture is similar – Flexible Jobs Index down 29.4% and Permanent Jobs Index down just 19.9%. Traditionally, in a softening jobs market, employers recalibrate their workforces towards flexible employment so they have more options should the business environment deteriorate further. Not this time!
  • The explanation may be put down to employers’ recent experience with skills and talent shortages. These are still widely reported in some sectors. If an employer does want to hire, then they are opting for Permanent staff so that they can lock in scarce talent.
  • Another possible explanation is that recent IR reforms are clouding the right and entitlements of casual workers (and therefore their employers). Previously employers were prepared to pay a premium for flexibility but if that flexibility has been eroded it might just be simpler to hire permanent staff or not at all.

 

Job Trends by Industry

Chart 4: Quarterly change in Australian Jobs Index by industry (1) 

  • Job postings for all these industries fell in the last quarter. The weakest were Public Administration, down 10.6% and Health Care, down 10.4%. Both are sectors that previously drove much of the strength in the employment market post Covid. Indeed, Public Administration peaked in January 2023 and Health Care peaked in March of that year. Both have seen substantial decline over the last twelve months. Healthcare has fallen a staggering 37.7%. Yet shortages remain.
  • In previous editions we have reported on the weakness in Professional Services. It is still struggling to regain any momentum, slipping a further 6.0% in the March quarter. The rate of decline has, however, slowed.
  • Education and Training has been one of the stronger sectors, rising in late 2023 as the tertiary sector expanded once more with the return of overseas students. It did slip 7.4% last quarter but it is in relatively good shape compared to many. Skills shortages will see growth in the TAFE sector to respond to increasing needs in Aged Care, Health Care and many trades.
  • Accommodation and Food Services is also showing surprising resilience, down just 3.5% in the quarter and little decline over twelve months. Prospects for the sector over the next year will be limited by the impact of cost of living, interest and rental expenses suppressing discretionary expenditure of home delivered food and dining out.
Quarterly job changes by industry (2)

Chart 5: Quarterly change in Australian Jobs Index by industry (2)

  • This second cohort of industries offers more positive news. Four of five report positive growth. The best of these is, surprisingly, Retail and Wholesale, up 5.9%. This reverses some of the gloom in the sector following three quarters of decline.
  • Mining, Construction and Utilities rose 3.9%. All face challenges in the months ahead, not least the Mining and Resources where falls in bulk non farming commodity prices will inevitably flow through to reduced production and job opportunities.
  • The last quarter also saw a sharp reversal in fortune for job seekers in the Financial Services sector. A 4.4% rise reduced the annual decline to 7.1%, now one of the better performing sectors. Widening interest rates margins have not really flowed through to employment in the sector post Covid.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 6:  Quarterly change in Australian Jobs Index by occupation

  • Every professional occupational group fell in the March quarter. All bar Health, Education and Community Professionals also fell during 2023. With data on job vacancies trending down it is very hard to see how the unemployment rate has fallen. Even if this provides temporary respite unemployment will inevitably rise in 2024.
  • The decline in Health and Education Professionals follows the declines already reported in their respective industry. The decline in Business Professionals mirrors that seen in Professional Services although these roles are spread far and wide across all industries.
  • The only (relatively) bright spot is Technology Professionals which fell just 0.7% halting the massive decline reported in Q4 2023. Demand for Technology Professionals has been the weakest in memory. They peaked way back in October 2021 and have fallen by 43.3% in two years, the worst of all occupations. The hope will be that the stabilisation seen in Q1 may continue. There are no signs yet that money is flowing back into early stage startups as it did when money was cheap.
Quarterly job changes by Occupation – Non-Professional

Chart 7: Quarterly change in Australian Jobs Index by occupation

  • Job postings for all “Non-Professional” occupations fell in the last quarter. All fell during 2023. The particularly large fall in Trades and Technicians is a surprise given the reported shortages of qualified trades people and new initiatives at state and Federal Government level to boost training spots in the TAFE system again. But sectors like Construction have been affected by interest rate rises so some softening in the short term is plausible.
  • We are finally seeing some stabilising of demand for Clerical and Administrative Workers. Demand fell just 0.1%. It fell substantially in the prior three quarters. The cumulative impact of those falls leaves Clerical and Administrative hardest hit in the last twelve months. A cumulative decline of 27.1% is the highest of all occupational groups.
  • There were substantial declines across Service and Community, Sales Workers and Labourers, Drivers and Operators. These all point to continued fragility in employment markets.

Job Trends by Region

Quarterly job changes by State/Territory

Chart 8: Quarterly change in Australian Jobs Index by State/Territory

  • Last quarter we commented on the particularly weak NSW employment market. The situation has gone from bad to worse with a further decline of 10.5% in the states job advertising volumes. Year-on -year decline of 30.2% is the worst of all states and territories.
  • Victoria fared better this quarter slipping just 4.8% but this is the fourth successive quarterly decline. The twelve months decline of 28.7% places it second to NSW! With our most populous states performing so weakly this weighs down heavily on the national scenario.
  • There are more positive stories in less populous states. Western Australia, Tasmania, South Australia and the Northern Territories all enjoyed increases in job opportunities in the last three months. All four also saw their indices peak during the quarter. All fell a little in March but remain at very high levels historically.

About The Jobs Report

The Australian Jobs Index is a measure of demand for talent (workers and professionals). Data is collected from over to 6,000 employer, recruiter and niche job boards across Australia. Repeat advertisements on one site or across multiple sites are de-duplicated to avoid double counting. Artificial intelligence is used to code every job advertisement into a wide range of key fields, from which detailed analysis is possible.

The charts, data, detailed analysis and commentary on the Jobs Report and Jobs Index are developed by Hro2 Research. Raw data is seasonally adjusted and trended using X-13ARIMA then indexed by Hro2 Research. These services are provided to RCSA Australia and New Zealand under license.

Raw data is provided under license to Hro2 Research Pty Ltd by Lightcast. All data in this report is Seasonally Adjusted.