The Australian workforce is ageing rapidly as baby boomers remain in their jobs for longer, while younger men give up looking for jobs.
In a report on Australian equities on last week, CIMB noted that men aged 45 and up were accounting for a growing proportion of the male workforce, as the participation rate among 15-34 year olds fell sharply.
From CIMB’s report:
Australia’s workforce participation rate – which is the percentage of the national population that is able and willing to work – fell to a seasonally adjusted 64.8% last November, down from 66.1% in November 2010.
ABS data shows that workforce participation among men fell from 72.9% to 71.3% in the three years, and 59.2% to 58.5% among women.
CIMB warned that the ageing population and number of young men disengaging from the workforce would continue to continue driving down labour force participation.
“The response of the labour market is probably the best way to measure how successfully the economy is at rebalancing,” analysts added.
“During the past 12 months, the unemployment rate has drifted upwards because job creation has not kept pace with new entrants entering the labour market.
“We expect this trend to continue for the next six months before a modest labour market recovery takes place in H2 next year. Recent data shows that demand for labour is no longer weakening, although there is no sign yet of a pick-up.”