AUSTRALIA – The Jobs Report, July – September 2023

Job postings fall again but employment remains resilient

Australian Jobs Index

Chart 1: Australian jobs index (seasonally adjusted)

Job Type Analysis

• The Australian market continues to show remarkable resilience against considerable economic and global political headwinds. The Australian Jobs Index fell 2.1% in the September quarter. It fell 0.6% in the June quarter. Successive interest rates, aimed primarily at increasing unemployment and decreasing inflation have, as yet, failed to make significant inroads. Unemployment has slipped just 0.2% in twelve months. Employment has risen considerably as a result of net immigration and increased workforce participation.
• The Australian Jobs Index is based on job postings, a lead indicator for employment in the following months. This smaller than anticipated decline suggests that the employment market will remain stable for the next quarter.
• To explain why, one has to look at longer term trends. Over the last two years, roughly since the end of the Covid pandemic, job postings have risen by 31.9%. Demand has eased since it peaked in early 2023 but the level of recruitment activity remains at a very high level. Talent shortages persist. Employers still struggle to find scarce talent although there is now greater balance.
• The breakdown in job type is also significant. In the last three months Permanent job vacancies fell 1.0%. Over the same period Flexible job opportunities (temporary and contract) have fallen 5.6%. It’s a similar story over twelve months – Flexible down 10.5% and, remarkably, Permanent up 4.2%. Traditionally in a down turning business cycle employers become cautious and rebalance workforces towards flexible solutions. This simply has not happened. Employers are acutely aware of skills shortages so continue to lock in staff where possible in permanent roles.

Job Trends by Industry

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

• We see quite a wide variation in performance across industries this quarter. The most notable rise is the surge in Accommodation and Food Services, up a remarkable 19.9%. Our data is seasonally adjusted, so this suggests a higher than normal drive in hiring for the Summer. This is a very obvious example of businesses hiring strong and early, only too aware of the shortages they encountered last year.
• The significant decline in Education is harder to explain. For virtually all of 2023 demand has been strong, not at record levels but still very healthy by historical standards. September may just be a historical aberration. Something to monitor over the next quarter.
• Healthcare and Social Assistance is also trending down, 8.4% this quarter. Skills shortages persist. Acute shortages unquestionably remain in nursing, aged care and childcare but post Covid migration is starting to help.

Quarterly job changes by industry (2)

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

• A 12.2% rise in job postings in Manufacturing and Distribution was unexpected but a welcome reversal of fortune after an 8.8% decline last quarter. Interestingly in the last two years it has been one of the fastest growing sectors. The falling dollars will help manufacturing going forward.
• Mining, Construction and Utilities continue to outperform the national norm, rising 7.2% in the quarter. This is another prime example of where business pressures – falling commodity prices, lower residential construction might expect to result in less hiring. This has not happened yet.
• Retail is remarkably stable. It fell just 0.3% in the September quarter and is down just 2.0% year on year. If interest rate rises are expected to reduce discretionary spending this is yet to be seen in the latest ABS Retail Sales figures. Likewise, employers remain confident.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 6:  Quarterly change in Australian Jobs Index by occupation

• The fall in Health, Education and Community Professionals is consistent with respective industry analysis (above). Demand only peaked in March this year but has slipped since then. Demand is still at a historically high level.
• This quarter has seen a surprisingly strong recovery in Technology Professional job postings. Job opportunities had been particularly hard hit by funding cuts by VC and PE firms. Funding is still a challenge, so this recovery is driven by increased demand from larger corporations and government. There have also been a number of start-ups in the Government Consulting arena in response to the criticism of the “Big Four”. Technology remains well below par. It is the only occupational group where job postings are below levels seen two years ago (down 17.4%).
• Demand is still strong for Executives and Managers (up 2.4%) and Business Professionals (up just 0.3%). The former is particularly robust. Senior level job opportunities have risen for three consecutive quarters establishing September as a record high month.

Quarterly job changes by Occupation – Non-Professional

Chart 7: Quarterly change in Australian Jobs Index by occupation

• All “Non Professional” occupations except Sales Workers fell in the last quarter. Sales Worker roles rose just 0.7% after a massive rise in Q2.
• The largest decline was a 8.2% fall in Clerical and Administration positions. It is ironic that lower skilled white collar roles have contracted while senior management positions are on the rise.
• Even Service and Community Worker roles have fallen in the quarter – down 2.8% suggesting some easing of widely reported shortages in Aged Care and Childcare.
• The market for Trades and Technicians has also eased from the post Covid explosion in vacancies. We’ve seen falls in three of the last four quarters resulting in a net 10.9% decline year on year, well below the peak demand seen in late 2021.

Job Trends by Region

Quarterly job changes by State/Territory

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

• The September quarter saw a strong rebound in the ACT. If the lull in Q2 was a reduction in recruiting by the large firms that had a stranglehold on Federal Government consulting then the rise this quarter may be driven by poaching by smaller competitor and a number of independent new startups eying an opportunity to secure sizeable consulting contracts.
• Western Australia was also up strongly – 7.0%. WA has been one of the fastest growing regions in the last twelve months (up 13.6% year-over-year) based on the success of the resources sector. Future trends will, however, be conditional upon Chinese demand for iron ore and other metals.
• Both NSW and Victoria sustained declines in the September quarter – 3.1% and 4.4% respectively. As the most populous states the national market is heavily dependent upon their fortunes. Both are also down year on year (NSW – ↓6.7% and Victoria ↓5.4%). Their performance in the next quarter will need to be watched closely to gauge whether unemployment will rise as many predict.

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 since Covid 19.