Australia’s jobs data for September was released last week, and it continues to tell the story of an economy in transition.
The ABS reported the unemployment rate fell in New South Wales (-0.1% to 5.9%), Queensland (-0.1% to 6.3%), South Australia (-0.2% to 7.7%) and Tasmania (-0.4% to 6.0%). In Victoria unemployment edged up 0.1% to 6.2%, while in Western Australia held steady at 6.1%. In trend terms, unemployment in the Northern Territory rose by 0.2% to 4.9% while in the ACT it increased 0.2% to 5.1%. Overall, the national unemployment rate held steady at 6.2% courtesy of a 0.1% decline in labour force participation to 64.9%.
Reflective of the various economic transitions that Australian has experienced over the past decade, the figure reported for September 2015 look very different to what they were in recent years.
In September 2005, in the middle of Mining Boom “Mark I”, Western Australia had the lowest unemployment rate of all the states at 3.9%. South Australia and Queensland, also heavily exposed to mining, had unemployment rates of sub-5% at 4.6% and 4.9% respectively. New South Wales, the state with the current lowest unemployment rate, sat at 5.3%, a comparatively high level for the time.
Moving forward five years, one year on from the start of the financial crisis, all the state with the exception of Western Australia had unemployment rates of between 5.1% to 5.4%. Western Australia, in the early stages of Mining Boom “Mark II” thanks an unprecedented infrastructure rollout program announced by China, still enjoyed the lowest unemployment rate in the country at 4.5%.
Moving forward even further to September 2014 – one year ago – the current trends in unemployment today really began to take hold. Powered by a lower Australian dollar assisting those states most aligned to the performance of the services sector, along with a renewed acceleration in activity in residential housing construction, New South Wales’ unemployment rate sat at 5.9%, the same level it is today. Unemployment in Victoria, although elevated, had unemployment of 6.7%, something that has fallen rapidly to 6.2% just one year later. Tasmania, the state with a near-perennial stranglehold on the highest unemployment rate across the Australia, had an unemployment rate of 7.6%, something that has subsequently tumbled over the past 12 month to just 6.0%, the lowest of all the states excluding New South Wales.
While the services-orientated states were seeing improved unemployment trends, those in the mining states were not. Western Australia and South Australia – those states most aligned to the fortunes of the mining sector – recorded unemployment rates of 5.1% and 6.8% respectively. Now, following a sharp deceleration in mining sector capital expenditure and lower commodity prices, the unemployment rates sit some 1% and 0.9% higher respectively. Queensland, while largely unchanged from where it currently sits today, also had an above unemployment rate of 6.4%. Renewed strength in the tourism sector may have been an offsetting factor.
Clearly, as the economy switched from resources-led growth to that powered by residential construction and consumption, so to have the trends in unemployment. Given the economic transition is still largely in its infancy, the movements seen over the past year look set to continue, at least on based on the current outlook for resources and services, in the years ahead.