There are tentative signs that businesses are testing the jobs market as new data show the first growth in advertisements for skilled workers since November 2007.
Quarterly construction data also proved more upbeat than expected, leaving economists toying with an upgrade of their growth forecasts for next Wednesday’s June quarter gross domestic product (GDP).
Government data showed skilled job vacancies rose 1.0 per cent in August compared with July.
“Not a huge rise, but significant that it seems to be turning after the recent rise in business conditions since the start of this year,” NAB Capital senior economist David de Garis said in a research note.
Still, the Department of Education, Employment and Workplace Relations’ (DEEWR) skilled vacancies index was 55.7 per cent lower than in August 2008.
Other key indicators of employment – such as the ANZ job ads series – have been pointing to a further deterioration in the jobs market, albeit at a slowing pace.
“(The DEEWR data) is a heads-up that the ANZ job ads could well print positive, and thus another sign of labour market stabilisation and a re-emerging increase in the demand for labour,” said Mr de Garis.
However, the modest strength in Wednesday’s data was not widespread, with a large 6.8 per cent drop in Queensland’s skilled vacancies, which now stand at a staggering 64.2 per cent lower than a year earlier.
But notably, demand for building and engineering professionals saw one of the largest increases in August, up 6.3 per cent.
Demand for such workers came as other data showed construction work completed in the June quarter totalled just over $35 billion, more than anticipated by economists.
Total construction work fell by a modest 0.1 per cent in the quarter. Economists had tipped a three per cent decline.
The figure followed an upwardly revised fall of 2.2 per cent in the March quarter, and risks a small upward revision of the 0.4 per cent GDP growth recorded the three months to March.
“Construction work done makes up a large component of business investment, which had been expected to be the key drag on growth in (the June quarter),” ANZ economist Riki Polygenis said in a research note.
She said these figures suggested some upside risk in her already strong 0.7 per cent growth forecast for next week’s GDP.
A further insight into business spending and investment plans will be revealed in Thursday’s key capital expenditure report.
The resilience in construction work at the time of sluggish economic activity was the result of a 5.7 per cent jump in engineering work during the June quarter.
“This suggests that a high level of work in the pipeline and perhaps stronger commodity prices are sustaining investment by the mining sector,” Ms Polygenis said.
But building construction dropped 5.7 per cent, with non-residential falling by 9.5 per cent and residential by 2.6 per cent.
Master Builders Australia’s chief economist Peter Jones said residential activity will recover late this year and into 2010, driven by low interest rates, the first home owners’ “boost” and social housing initiatives.
“Nonetheless, with the housing sector facing twin hurdles of weak investor activity and the end of the `boost’ scheme, dwelling investment is unlikely to significantly contribute to economic growth until well into 2010,” Mr Jones said.