Australian hourly wage growth remains stuck in the mud, rising by a paltry 0.5% in the September quarter.
Part of the reason wages continue to wallow at near record lows, even with recent strength in employment growth, is because there’s still an abundance of underutilised workers — those either unemployed or employed but who would like to work more hours — in the Australian labour market.
While demand is clearly strengthening, there’s still an abundance of supply, keeping wage growth incredibly muted.
In order to help boost wage pressures, this supply, also known as labour market slack, needs to be absorbed through continued declines in the number of underutilised workers.
On that front, things are looking good.
According to data from jobs website Seek, job advertisements placed on its platform surged by 16.1% in the 12 months to October, the fastest pace seen this year.
“Fuelling this advertising uplift was positive growth across 28 of the 29 industries,” said Michael Ilczynski, Managing Director for Seek Australia and New Zealand.
“Our October data has revealed that hirers are keen to secure new employees ahead of the busy festive season and New Year.”
This chart from Seek, showing annual job advertisement growth by industry, certainly helps to build confidence that strong growth in hiring will continue in the months ahead, an outcome that bodes well for helping to reduce labour market slack.
Like the headline national increase, Seek said advertisements lifted in all Australian states and territories, led by South Australia.
“While off a lower base, South Australia recoded the largest annual growth of all states and territories, up 24.5% year-on-year,” Ilczynski said.
Like South Australia, there were also strong increases seen in Australia’s mining states and territories, Western Australia and the Northern Territory.
“The Western Australian labour market is still recovering but recorded an impressive 19.2% year-on-year growth this October, with trades, services and mining, resources and energy offering the most job opportunities across the state,” Ilczynski said.
Ads in the Northern Territory grew even faster, logging an increase of 21.2% from a year earlier.
Elsewhere, advertisements in Queensland, Victoria, Tasmania, the ACT and New South Wales grew by 18.9%, 18%, 14.9%, 12.7% and 12.4% respectively.
So while growth in advertisements is booming in locations where economic conditions are recovering, even states that recorded strong gains in employment this year, demand for workers remains strong.
That’s a good sign for employment growth, both ahead of today’s Australian jobs report for October and over the short-to-medium term.
If hiring of the magnitude seen recently continues, it will only help to soak up labour market slack, and, hopefully, help to build a bit of wage pressures for workers.