Malcolm Turnbull and Scott Morrison will be hoping the generally good improvement of job vacancies points to a better year for jobs than we had in 2016. Another year of falling full-time work would be disastrous, both for their government and more importantly, for workers.
It must be said that 2016 was a pretty awful year for jobs. The final figures are out this week, but last year is on track to be the second worst year for employment growth in the past 20 years:
In the 12 months to November last year, employment grew by a mere 0.7% – less than half the 20 year annual average growth of 1.8%. Last year also looks like being the just the fourth year in the past 20 to see full-time employment go backwards.
Little wonder that during last year’s election, those in the government were much more eager to talk about the employment growth of 2015 – as that was the best year since 2010.
The sharp drop in employment growth last year can be seen by how difficult it has become for the LNP to achieve Tony Abbott’s promise from the 2013 election of one million jobs in five years.
Initially that would have required employment to grow by 1.75% each year, the strong jobs growth in 2015 saw the annual growth rate (think run rate from the cricket) hit 2.6%, well above the “required” growth rate.
However to get to one million new jobs by September 2018, the required employment growth rate is 2.3% – well above the current rate of 0.7%:
The other big problem is that only 30% of the 495,900 jobs created since September 2013 have been full-time. In September 2013, 69.6% of all employment was full-time, now it is 68% – equivalent to 191,000 fewer full-time jobs
And yet the news is not all bad. Last week the latest job vacancy figures released by the ABS showed the 13th consecutive quarter of increasing vacancies – an equal record long run:
The growth of vacancies is slightly better in the public sector than the private, and both have come off the recent peaks of early 2016:
That said, the job vacancy rate and the number of unemployed per vacancy are better now than they have been at any time since 2012:
In trend terms there were just 3.9 unemployed per vacancy – well down on the 5.2 reached at the end of 2014.
Partly this is due to the falling participation rate – down from 65.1% at the end of 2015 to now 64.5%.
The fight for jobs becomes a bit easier when some people give up looking for work. Had the participation rate in November 2016 been the same as in November 2015, there would have been 4.6 unemployed on average for each vacancy - meaning the fight for jobs would actually have gotten worse.
As ever, how good things are depends on where you live, and what job you are after.
In NSW there are on average just 3 unemployed per vacancy, and Victoria is second best with 4.2 unemployed fighting for each job. Tasmania and South Australia are the toughest places to get a job, while with 5.3 unemployed per vacancy, it’s now harder to find a job in WA than at any point since the GFC:
The strongest job growth has come in the education industry and the “other services” sector (which includes jobs like automotive and machinery repair, and personal services such as hairdressing).
The weakest growth of job vacancies is in art and recreation, mining, transports and warehousing and construction:
Thus the picture remains quite uneven for job hunters, but in a political environment where the Turnbull government is suffering from a lack of popularity, and where this year’s budget is likely to be a tough one should Scott Morrison deem that keeping a AAA credit rating is imperative, the government will be desperately hoping 2017 is not a repeat of 2016.
And while the job vacancy figures suggest a solid if not bounding levels of job creation, the department of employment’s leading indicator of employment index does provide some cause to think 2017 will be better than was last year.
Since November 2014, the department’s leading indicator index has barely been registering a positive rating – suggesting a weakening employment market. But the signs have been getting better. In December, the indicator, which takes into account a variety of economic indicators – including the Chinese manufacturing managers purchasing index – was just -0.03. That is the best result since September 2015:
Malcolm Turnbull and Scott Morrison, as well as anyone looking for work, will be hoping that follows through to stronger job growth over the next 12 months. History would suggest it couldn’t be worse than it was last year, but, as ever, the real question will be whether there is a return to strong full-time job growth.
Without that, both the prime minister and treasurer will struggle to convince voters of the worth of any economic future they promise.
