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Unemployment 2017: Winners & losersLabour Force
Regional unemployment: Unemployment rates vary significantly across regional Australia. Remote regions of the country such as Outback Queensland had the highest unemployment rate of 12.8 per cent in December. Wide Bay, Queensland (9.0 per cent), Coffs Harbour-Grafton, NSW (8.7 per cent) and Townsville, Queensland (8.5 per cent) also have unemployment rates well above the national annual average of 5.6 per cent.
Unemployment in cities: Pockets of disadvantage exist in cities with the western suburbs of Melbourne recording an unemployment rate of 9.0 per cent in 2017. Ipswich in Brisbane’s outer western suburbs recorded an unemployment rate of 8.1 per cent. Adelaide’s north and western suburbs also had unemployment rates of 7.7 per cent and 7.4 per cent, respectively over 2017. Closures to car manufacturing plants have led to job losses in these metropolitan areas.
What does it all mean?
Aussies are experiencing a jobs boom with the strongest employment growth recorded in 12½ years. However, there are regions of the country still experiencing difficult economic and labour market conditions.
Generally people in metropolitan areas earn higher incomes than their cousins in the country, but employment outcomes vary considerably.
Unemployment has increased in several Queensland regional centres in recent years. Outback Queensland, which includes western and far north areas of the state, has the worst unemployment rate in the country. That said, Cairns’ average unemployment rate has improved to 5.9 per cent in 2017 from 7.8 per cent a year ago.
Queensland’s coastal regional centres such as Bundaberg, Maryborough, Gympie, Bundaberg and Hervey Bay, known more broadly as Wide Bay (average 9.0 per cent), together with Townsville (albeit lower at 8.5 per cent) have elevated jobless rates. Manufacturing jobs in Wide Bay have declined by 1,306 between 2010 and 2016 according to Regional Development Australia.
The average unemployment rate in Coffs Harbour-Grafton on the NSW Mid-North Coast deteriorated to 8.7 per cent over 2017. Pleasingly, the actual unemployment rate fell to 6.1 per cent by year-end. Construction jobs have increased, underpinned by the $3.3 billion Pacific Highway upgrade between Port Macquarie and Coffs Harbour. A further 2,970 workers are expected to be employed on the $4.36 billion Woolgoolga to Ballina road upgrade.
Unemployment also increased along the suburban fringes and city ‘spines’ such as Ipswich (8.1 per cent) in Brisbane and the western suburbs of Melbourne (9.0 per cent). Around 950 jobs were lost at Holden’s Elizabeth factory in Adelaide’s north in October, pushing up the area’s unemployment rate to 7.7 per cent.
Higher income metropolitan areas, especially in Sydney’s coastal suburbs, dominate the regions with the lowest unemployment rates. However, the corridor between Broken Hill and Dubbo has Australia’s lowest regional unemployment rate at 2.9 per cent, benefitting from agricultural, tourism and mining-related jobs growth.
Melbourne satellite city Ballarat has experienced faster and younger population growth than its regional Victorian peers, supporting jobs growth. The unemployment rate in Ballarat has fallen to 4.1 per cent from 5.3 per cent over the year to December.
In Western Australia, Mandurah, south of Perth, experienced a significant decline in the jobless rate to an average of 7.0 per cent in December from 11.2 per cent a year ago. Mandurah has benefited from job creating projects such as the Dwellingup National Trails Centre and Quambie Park aged care expansion.
What do the figures show?
Regional unemployment:
Over the year to December 2017 the average unemployment rate:
Increased in Coffs Harbour-Grafton by 3.3 percentage points to 8.7 per cent.Increased in Bendigo by 2.4 percentage points to 6.6 per cent.Increased in Brisbane-West by 2.1 percentage points to 6.4 per cent.Decreased in Mandurah by 4.3 percentage points to 7.0 per cent.Decreased in the NSW Far West and Orana by 2.9 percentage points to 2.9 per cent.Decreased in Townsville by 2.8 percentage points to 8.5 per cent.
Why is the data important?
The Australian Bureau of Statistics (ABS) provides detailed labour market figures one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.
What are the implications?
The jobs boom continued in December with Aussies enjoying the equal longest stretch of consecutive monthly employment gains. One more monthly increase in early 2018 will break the survey record going back to 1978.
More jobs are being created and fewer people are unemployed. However, employment outcomes are uneven across regional and metropolitan areas of the country. The closure of manufacturing plants have displaced factory workers in some regions with 84,000 jobs lost in the 12 months to November according to the Bureau of Statistics.
Around three quarters of the new jobs added over the past year are full-time in the tourism, health care, retail, education and construction industries. Towns, cities and suburbs across the country have benefitted, especially Mandurah in Western Australia and the NSW Far West.
CommSec expects interest rates to remain on hold until year-end.
Originally published by Ryan Felsman, Senior Economist, CommSec