Job postings stabilise

Executive summary

  • The Australian employment market continues to show remarkable resilience with the Australian Jobs Index easing just 1.0% in the December quarter.

  • There is no doubt that the market has stabilised. The rise in Q2 was 7.0% and just 0.3% in Q3. This is the first decline since the September 2021 quarter.

  • Vacancies remain 5.7% higher than this time last year, a clear indication that, thus far, it’s been a “soft landing”.

  • The Permanent Jobs Index rose 1.3% in the last quarter while the Flexible Jobs Index fell 8.0%.

  • The fastest growing sector in the last quarter was Professional Services. It rose 7.5%.

  • Healthcare recorded a surprising decline in job postings in the quarter (4.7%). It is still 6.3% higher year-on-year.

  • The 7.0% fall in Health, Education and Community Professionals stand out. This is the first quarterly decline in job postings for those sectors since September 2021.

  • Retail and Wholesale declined 4.1% in the quarter. Retail enjoyed a good recovery post Covid but the impact of interest rate rises on discretionary spending may already be in the minds of employers.

  • Executive and Management roles also declined in the December quarter – by 4.2%.

  • The standout performer for the quarter was Service and Community Workers where, contrary to broader employment conditions, demand rose considerably..

  • In the December quarter the most significant changes were the 4.2% fall in NSW and the 1.7% fall in Victoria. These account for around 35% and 25% of national job postings respectively.

  • Queensland was the only large Eastern Seaboard state to record a rise in job postings. They rose 1.7%.

Australian Jobs Index

Chart 1: National job index (seasonally adjusted)

Job Type Analysis

  • The Australian Jobs market continues to show remarkable resilience with the Australian Jobs Index easing just 1.0% in the December quarter. The combined threats of high inflation, rising interest rates and talk of a recession seem to be outweighed in the minds of employers by the ongoing difficulty with finding talent. It may be that employers believe the long-term strategic imperative to build capacity outweighs near term concerns of a recession.
  • There is no doubt that the market has stabilised. The rise in Q2 was 7.0% and just 0.3% in Q3. The 1% decline the December quarter is the first decline since the September 2021 quarter when lockdowns stifled the employment market. Vacancies remain 5.7% higher than this time last year, a clear indication that thus far it’s been a “soft landing”. Job vacancies are at very high levels by historical standards. Indeed, what we are now experiencing is a more balanced market.
  • The split between Permanent and Flexible trends is also telling. The Permanent Jobs Index rose 1.3% in the last quarter while the Flexible Jobs Index fell 8.0%. Historically, when the Australian economy starts to show signs of contraction, employers tend to engage a higher proportion of non-permanent labour to allow them greater flexibility to respond should things deteriorate. This is clearly not happening. The scale of the decline in Flexible job postings suggests some statistical noise in the December numbers, not usual in December/January when the employment market takes a break. This decline might be exaggerated. The trend will become clearer next quarter.

 

Job Trends by Industry

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

  • The fastest growing sector in the last quarter was Professional Services. Job postings rose 7.5%. This reversed a significant decline in the prior quarter. The sector has ebbed and flowed through much of 2022 and remains one of only two sectors to have declined year on year. This latest rise is encouraging but may suggest a tough year ahead.
  • Healthcare recorded a surprising decline in job opportunities in the quarter (4.7%). This is a little misleading. Demand was at record levels in August and has eased since then. It is still 6.3% higher year-on-year despite less demand placed on the sector by Covid cases.
  • The decline in job postings across Accommodation and Food Services was greater still (14.1%). This is hard to explain. There is no doubt that skills shortages remain. If employers failed to find staff before the holiday season, they may have stopped recruiting and focused on what resources they have. We are yet to see the return of Chinese tourists who, should they return at pre Covid levels, will exacerbate those shortages and lead to a recovery in the volume of job postings.
Quarterly job changes by industry (2)

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

  • Declines in job postings were broad across most of the industries in this cohort. We saw strong growth in Manufacturing and Distribution in the first half of 2022. Demand peaked in May and has fallen steadily since. Distribution excelled during lockdown and has benefitted from on-line shopping. But issues with some delivery services and the announcement of global cutbacks by Amazon have reversed that trend and tempered future employment expectations.
  • Likewise, Retail and Wholesale job postings declined 4.1% in the quarter. Retail enjoyed a good recovery post Covid but the widely anticipated impact of interest rate rises on discretionary spending may already be in the minds of employers. Employers are taking a conservative “wait and see” approach.
  • Mining, Construction and Utilities are a clear example of softening demand. Mining companies prospered very well in early 2022, helped by rising commodity prices due to the Ukrainian War. Now those prices are easing, and employment opportunities have slowed. Meanwhile interest rate rises and material prices/supply chain constraints developments are hurting prospects in the Building and Construction sector.

Job Trends by Occupation

Quarterly job changes by Occupation – Managers and Professionals

Chart 6:  Change in occupational job indices on prior quarter

  • The 7.0% fall in postings for Health, Education and Community Professionals stand out. This is the first quarterly decline since September 2021. Deeper analysis shows that these declines were evenly shared across all professional sub sectors. This indicates that some of the most intense needs in Healthcare during the pandemic may have retreated. While that may be the case, the year-on-year rise in demand for the Healthcare sector, reported above, would indicate that systemic shortages remain.
  • Executive and Management role posting also declined in the December quarter – by 4.2%. Demand fell in October and stayed down. This brought an end to an exceptional run of growth that peaked in July. Organisations looking to trim costs in uncertain times may be starting to question the need for senior external appointments. Despite an easing this quarter however, demand remains at a very high level historically.
  • There was little movement in Technology Professionals (up 0.9%) and Business Professionals (up 1.0%). Both showed signs of weakness in Q3. These rises are small by comparison to the 9.7% and 3.4% falls in the September quarter, and suggest a stabilisation in markets that were extremely buoyant in early 2022.
Quarterly job changes by Occupation – Non-Professional

Chart 7:  Change in occupational job indices on prior quarter

  • The standout performer for the quarter was Service and Community Workers where, contrary to broader employment conditions, demand rose considerably. Roles in this Occupational Group include Carers, Hospitality, Personal Fitness and Travel Agents, all areas to enjoy strong post Covid recovery.
  • Sales Workers shed 2.0% after recording phenomenal growth in Q3. Last quarter’s rise was attributed to a push for seasonal workers in Retail. Our prediction that the growth in Q3 demand may not be maintained in Q4 proved correct.
  • Labourers, Drivers and Operators grew by 2.4% in the quarter. Some of these occupations are amongst the lowest paid workers.It will be interesting see whether the 5.2% rise in the National Minimum Award rate impacts demand in this category over the coming year.

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.