This indicator suggests Australian jobs growth will continue to slow

Harold Cunningham/Getty Images
  • Online job vacancies in Australia fell for a third consecutive month in June.
  • Openings fell across most states and territories and occupational groupings.
  • The decline points to the likelihood that employment growth will slow in the second half of the year.

While Australian employers are saying they’ve never had as many job openings as they do right now, the Australian government’s Internet Vacancy Index (IVI) is telling a slightly more troubling story.

According to this measure, they fell for a third consecutive month in June, dipping by 1%, or 1,800 positions, to 180,100 in trend terms.

The soft result left total growth in the IVI over the past year at just 4.2%, well below the levels seen in recent years.

On face value this suggests the rapid, and unexpected, increase in employment in June is unlikely to be repeated in the second half of the year.

Based on the inverse relationship between the IVI series and Australia’s unemployment rate seen in the chart below, it also suggests that unemployment may begin to creep higher in the period ahead.

Department of Jobs and Small Business

Adding to the downbeat report, vacancies fell in all states and territories except for Tasmania over the month.

Worryingly, openings in New South Wales — the most populous state in Australia — led the decline with a fall of 1.4%. Vacancies in Victoria also slipped by 0.7%.

Indicating that demand for workers in regional areas may be softening, vacancies increased faster than the national average in many capital cities over the past year.

Hobart recorded the strongest rise at 18.6%, followed by Perth (18.3%), Melbourne (13.5%), Darwin (10.3%), Brisbane (7.9%) and Sydney (7.3%).

Department of Jobs and Small Business

Mirroring the trend seen across the country in June, vacancies were also flat-to-lower in all occupational groupings, driven largely by 1%-plus falls in openings for professionals, clerical and administrative staff and sales workers.

Reflective of the downturn in the housing market seen in many parts of the country, vacancies for labourers fell by 0.9% over the month leaving the decline on a year earlier at 5.6%.

Department of Jobs and Small Business

The IVI is based on a count of online job advertisements newly lodged on SEEK, CareerOne and Australian JobSearch during a particular month.

The government says it does not reflect the total number of job openings in the labour market as it does not include jobs advertised through other online job boards, employer websites, word of mouth, in newspapers, and advertisements in shop windows.

It also does not specify whether vacancies are for full-time, part-time or casual workers.

In contrast to the IVI, the ABS job vacancy report — released quarterly — is a survey of approximately 5,400 employers, selected from the ABS Business Register.

In the three months to May, it reported that vacancies rose by 4.6% to 234,200, the highest level on record.

In its July monetary policy statement, the RBA made specific mention of this report, noting “the vacancy rate is high and other forward-looking indicators continue to point to solid growth in employment”.

“A gradual decline in the unemployment rate is expected, after being steady at around 5.5% for much of the past year,” it said.

Based on the IVI in June, that outlook appears more uncertain.

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