Now here’s a bullish chart for anyone looking for a job in Australia.
From the Commonwealth Bank, it shows that job vacancies hit the highest level on record in the three months to August.
According to the Australian Bureau of Statistics (ABS), vacancies jumped by 6% to 203,700 in seasonally adjusted terms, leaving them up a staggering 15.4% on the same period a year earlier.
In trend terms, eliminating volatility in the seasonally adjusted series, vacancies rose by a smaller 3.9% to 201,300, up 14% from a year earlier.
Openings in the private sector — the largest employer in Australia — increased by 3.8% to 181,400 in trend terms, a lift of 13.7% on 12 months earlier.
In comparison, public sector vacancies rose by a larger 4.5% to 19,900, leaving the increase over the year at 16.8%.
Michael Workman, senior economist at the Commonwealth Bank, says that’s a very good sign on the outlook for employment growth in the year ahead.
“The vacancies trends indicate that we should expect average monthly jobs gains in the 18,000 to 22,000 range over the next few quarters,” he says.
“We expect another 250,000 jobs to be added over the next year, adding to the already robust jobs growth of 325,000 over the year to August.”
Workman says that hiring of such magnitude “should be sufficient to keep some downward pressure on the national unemployment rate given the very gradual downward trend in the participation rate as the population ages”.
“We expect the unemployment rate to be around the 5.4% level by year end, from its current 5.6%,” he says.
Should labour market conditions tighten further as Workman suggests, that should only help to build confidence that wage growth — currently running at record-lows for private sector workers — should start to pickup in the period ahead.
Many regard an unemployment rate of 5% or less as necessary to lead to a pickup in wage pressures.
In a speech delivered earlier this month, Reserve Bank of Australia governor Philip Lowe said that he was already seeing signs that was occurring in sectors where demand for workers was strong.
“Even at the moment, we see some evidence through our liaison program that in those pockets where the demand for labour is strong, wages are increasing a bit more quickly than they have for some time,” he said.
“The Reserve Bank’s central scenario is that, over time, this will become a more general story.”
Adding to that view, recent data from jobs website Seek revealed that salary levels are now starting to accelerate in industries where hiring levels have been strong.
By mainland state, vacancies rose in New South Wales, Queensland, Western Australia and Victoria. The gain the latter was particularly impressive, as seen in the chart below.
By sector, Workman says that Australia’s services sector continued to lead the way.
“The services sectors are displaying most of the gains which is line with general industry trends over the past few years,” he says.
“Higher job vacancies were recorded in construction, transport, manufacturing, utilities, education and health, and culture and recreation.”
After a stellar start to the year, Australia’s recent hiring spree, based off this and other leading labour market indicators, looks like it will continue in the months ahead.
However, as Callam Pickering, Asia-Pacific economist for global job site Indeed points out, even with strengthening labour market conditions, it will likely take some time until workers see any meaningful lift in wages.
“While encouraged by the recent set of data we are reminded that there is still a high level of slack across the labour market,” he says.
“The number of vacancies, per unemployed person, is now at a five year low but remains well above its pre-crisis level. Furthermore, there are many people who consider themselves underemployed who continue to search for more hours.
“While there is still some way to go before stronger employment triggers higher wage growth, a stronger labour market will continue to support household spending and the broader economy over the remainder of the year.”
For those looking for more granular detail as to where vacancies are currently located, this table from the ABS has further details.