Australian employment conditions point to annual job creation of 230,000 jobs, which is sufficient to reduce the nation’s unemployment rate, according to National Australia Bank’s May business survey.
Employment conditions eased slightly in the month, but has stayed at levels that indicate a healthy rate of job creation in the economy. That is consistent with the recent lift in employment growth, according to ABS data, and suggests the strength is likely to continue in coming months.
The employment index fell 1 points, to +6 index points, which is well above the long-run average for the series, NAB said.
NAB’s survey results should comfort policymakers and investors who are keeping a close eye on the unemployment rate to determine the strength of the economy amid record household debt and a frothy housing market.
The following charts from NAB’s survey show the robust labour conditions.
Job creation: Annual additions of 230,000 jobs or about 19,000 new roles a month is enough to cut the unemployment rate further, NAB said.
Mining sector improving: Changes in employment conditions varied across industries in May. There was a particularly large decline in wholesale that fell by 17 points, which was followed by construction that dropped by 7. In contrast, manufacturing was up 6. Mining now has the best employment conditions at +13 index points, while personal services were next highest at +11.
Australian employment grew for a seventh consecutive month in April, recording another hefty increase in the process that sent the employment rate to a four-month low of 5.7%. The labour data for May is due on Thursday.
According to NAB’s May business survey, business operating conditions remained near the highest levels seen since the global financial crisis.
The survey’s conditions index — a measure on trading, profitability and employment — fell one point to +12 during the month, a strong outcome that left it sitting well above its long-run average of +5 points.
While conditions remained elevated, there was a noticeable pullback in business confidence, suggesting that the boom times currently being enjoyed across the sector may not last.