AUSTRALIA – The Jobs Report, July – September 2022

Job postings stabilise

Australian Jobs Index

Chart 1: National job index (seasonally adjusted)

Job Type Analysis

• Despite the spectre of high inflation, rising interest rates and talk of a recession the Australian employment market still managed to rise 0.3% in the September quarter. The rise reported in the June quarter was 7.0%. Clearly these factors are having a bearing on demand. The market is starting to plateau but, with such acute shortages of talent, employers continue to hire at near record levels.
• The continued strength of the labour market can be best judged by medium-term trends. The Australian Job Index is 30.9% higher than September last year. Although some allowance needs to be given for lockdown that was still in place in some states this time last year, demand actually peaked last November. This really reflected the release of enormous demand that built up over the pandemic.
• The figure that really stands out is that job vacancies are a staggering 64.3% higher than two years ago. As such, some element of slow down seems inevitable. The “soft landing” we have seen thus far demonstrates that the largely globally driven current economic headwinds are simply a temporary aberration from the long-term structural labour shortages challenging business and policy makers. Indeed, employers may take some comfort and confidence from a slightly more balanced market.
• Our analysis breaking down job postings by job type does, however, highlight an important change in employer behaviour. In the last three months demand for flexible workers rose 11.7% while permanent job opportunities eased 2.9%. This is something we see whenever business conditions become more uncertain.
• Nevertheless, employers still want, and need, to hire to fill gaps in their workforce which limit capacity and the employment of temporary staff provides greater flexibility should the economy tumble further.

Job Trends by Industry

Chart 4: Change in sectoral job indices on prior quarter (1)

• The only sector showing a significant decline is Professional Services. This is a little surprising as there is no obvious reason why the fall in business confidence and hiring should be so pronounced and largely isolated to this sector. The prior quarter was in line with the national norm. The level of hiring activity was particularly strong in Q2 so this may simply be a return to more stable recruitment activity by employers in the Professional Services field.
• Healthcare rose a net 2.2% over the quarter. The Index peaked just over 200 in August. This infers a doubling of positions advertised in August 2022 compared to our base month of June 2018. Demand has grown steadily throughout this period but was of course accelerated during the pandemic. The systemic shortages of doctors and nurses remains a critical issue. Shortages in Allied Health is also now of concern.
• Trends in demand in the Public Sector typifies the broader stabilisation in the employment market. In Q2 we reported a 17.2% rise. This has now fallen to a decline of 1.7% in Q3. State government hiring remains the major driver of that demand while hiring at a federal level has eased due to budgetary constraints.
• The number of job opportunities in Accommodation and Food Services crept up by a net 2.9% in the September quarter. The record level of vacancies set in May was exceeded in July and August (also above the 200 mark) and only eased slightly in September. As we move towards to major Christmas/New Year period, faced with global shortages of staff in the sector, the situation is unlikely to improve for businesses struggling to find staff across the full range of positions.

Quarterly job changes by industry (2)

Chart 5: Change in sectoral job indices on prior quarter (2)

• The 10.1% rise in demand in Retail/Wholesale is an encouraging sign for job seekers in a sector seriously bruised during the pandemic. This is the time of year that many larger retails boost their headcount in anticipation of a pickup in seasonal demand. Many employers have already announced significant recruitment campaigns. Recent ABS data for Retail State show continued strength (up 19.2% y-o-y). It is clear from these figures that the anticipated decline in discretionary spending because of rising interest rates and power prices is yet to materialise.
• Trends in Financial Services mirror that of the broader Professional Services sector (highlighted above). Demand declined by 9.2% in the quarter but only after a very bullish second quarter.
• The quarterly change in Manufacturing and Distribution (down 0.9%) and Mining, Construction and Utilities (up 1.7%) understate the exceptionally high levels of demand for staff in all these sectors. All employers are facing extreme difficulties in finding suitable staff. Mining companies, in particular, are turning to overseas markets in the hope of finding scarce talent.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 6:  Change in occupational job indices on prior quarter

• The 9.7% decline in Technology Professionals is contrary to expectations. Specialists in the field report continuing strength. Our data has been volatile all year with months of weak numbers bookended by far stronger months. February and May were both quiet as was September. July and August were strong. While the fall was consistent with the declines in Professional and Financial Services industries this is more likely another temporary aberration rather than a weakening trend emerging.
• Demand for Health, Education and Community Professionals rose a net 3.6% in the quarter. Deeper analysis suggests Healthcare and Community remains very strong while job opportunities for Education Professionals, particularly in the Tertiary sector are finally picking up again after a challenging couple of years. The return of overseas students and additional funding poured into the TAFE system following the Federal Government’s Jobs and Skills Summit should see this market continue to expand in the short to medium term.
• Both Executive/Management and Business Professional demand eased slightly in the quarter, down 0.8% and 3.4% respectively. But both are strong by historical standards. Executive and Manager roles peaked at a new record high in July, eased slightly after that but remain 39.3% higher than a year ago.

Quarterly job changes by Occupation – Non-Professional

Chart 7:  Change in occupational job indices on prior quarter

• It was an extremely strong quarter for Sales roles. They rose 11.4%. It was particularly buoyant in August and September. In August the level of job opportunities threatened to exceed the record number of advertisements seen in November 2021 when we emerged from lockdown. The rise in seasonal sales vacancies in the Retail and Wholesale sector will have contributed strongly to this rise. Demand may well ease from now until Christmas.
• The recovery in demand for Clerical and Administrative workers both during the pandemic and as we emerge from it has been astounding. Previously, technological advancement was challenging the future of many clerical occupations. But the changing nature of work, particularly Working From Home, seems to have breathed new life into these occupations. Vacancies are now 40.9% higher than a year ago and 89.0% above September 2020. This is well above the norm across all occupations.
• The 6.5% fall reported in Trades and Technicians is deceiving. The second quarter of 2022 was particularly strong. The extent of systemic skills shortages was evident in the recent National Skills Commissions report where carpenters, electricians, chefs, and mechanics were towards the top of the “Skills Priority List”.

Job Trends by Region

Quarterly job changes State

Chart 8: Change in state / territory job indices on prior quarter

• The standout performer for the quarter was clearly NSW where job opportunities rose 9.7%. August then September were both record high levels of vacancies suggesting ongoing strength in our most populated state. It is also the state where the greatest number of vacancies are posted – currently 35.8% of all job advertisements. This was not the case during the pandemic. This time last year it was just 30.4%.
• In priority reports we have observed the remarkable recovery of the employment market in Victoria post their extended lockdowns. The 6.2% decline in the September quarter suggests that momentum has been lost. The November state election may have created some uncertainty in the minds of employers.
• Both the ACT and Tasmania report sizeable declines. The scale of those declines mean that they are the only regions where the number of vacancies in September 2022 are now lower than twelve months ago. The decline in the ACT can be attributed to the decline in Federal Government job vacancies. Tasmania is broader and may be evidence of weakening local business conditions and confidence denting a previously robust employment market.

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. Trend analysis has been suspended during Covid 19.