Biggest fall in job ads in 16 months. Record multiple jobs

Biggest fall in job ads in 16 months; Record multiple jobs

Skilled job vacancies; Labour Account

What happened? Preliminary skilled job vacancies fell by 5.6 per cent (12,828 jobs ads) to 216,031 available positions in August. While it was the third monthly decline after reaching a 12½-year high in May (240,039 ads), recruitment activity is still up 55.6 per cent (or 77,177 ads) when compared to a year ago. And vacancies are still up 35.7 per cent (or 56,820 jobs) when compared to pre-Covid-19 levels in February 2020. Vacancies fell by 9.2 per cent in NSW, followed by the ACT (down 9.0 per cent), Victoria and Queensland (down 5.9 per cent).

The Bureau of Statistics (ABS) has released a report detailing developments in the job market over the June quarter. In seasonally adjusted terms, the proportion of employed people working multiple jobs increased to 6.5 per cent, continuing to rebound from a record low of 4.9 per cent in the June quarter of 2020. In the June quarter of 2021, the number of multiple job holders hit a 27-year high of 867,900 people after falling to an 8-year low of 622,600 persons a year ago.

Implications: Shares of ASX-listed online job hiring giant SEEK are hovering near record highs, but the company is trading ex-dividend today. A few weeks ago, SEEK announced its financial year 2021 results, reporting a 58 per cent jump in net profits after tax to $141 million. A strong rebound in job ad volumes to all-time highs in both Australia and New Zealand saw revenue in the region grow by 40 per cent to $541 million over the year. But the company warned that it continues to experience volatility in hiring demand due to localised Covid-19 Delta outbreaks.

Job vacancies are a key gauge of future employment.

What does it mean?

• Aussies are working multiple jobs in record numbers. In fact, data released by the Bureau of Statistics (ABS) today shows that at the end of June almost 868,000 people were working several jobs with the proportion of those employed at 6.5 per cent also the highest in 27 years (since September 1994).

• Why? While hours worked increased by 1.8 per cent in the June quarter (prior to the latest Delta-induced lockdowns), it has become more difficult for some Aussies to get more hours of work in certain occupations and regions due to government restrictions. And the pandemic impact on supply chains and varied demand for goods and services across the economy could also be a key factor. Of course, the rise of the ‘gig’ economy and a preference for younger and even older Australians to work more flexibly may mean they work multiple jobs at once.

• Another leading indicator of labour demand was released today. The National Skills Commission reported that skilled national job vacancies were down 5.6 per cent (or 12,828 positions) in August, the biggest monthly fall in 16 months. Encouragingly, the cumulative number of job ads are down 9.1 per cent or 21,603 positions since June – much less than the record falls seen in last year’s national lockdown. In fact, over the three months to April 2020, vacancies plunged by a cumulative 56.6 per cent to a series low (since January 2006) of 69,047 available positions. At the end of August 2021, a still-healthy 216,031 positions were being advertised around the country, which is 56,820 more vacancies than pre-pandemic levels in February 2020.

• While the extended lockdowns have reduced recruitment activity, job vacancies in August are still well above pre-pandemic (February 2020) levels in both NSW (+8,437) and Victoria (+16,989). So while the near-term outlook for the labour market is negative, with mass job ‘losses’ and fewer hours worked, the data suggests that some businesses are acutely aware that they’ll need additional workers once these economies eventually re-open. And there are jobs still being added in “Covid-free” regions like Western Australia.

• That said, some businesses have scaled-back their hiring plans from the 12½-year high in national vacancies recorded in May 2021. In August, job vacancies dropped sharply in NSW (-9.2 per cent), the ACT (-9.0 per cent), Victoria (-5.9 per cent), Queensland (-5.9 per cent) and Tasmania (-2.2 per cent). But ads increased in the Northern Territory (+2.3 per cent), South Australia (+1.1 per cent) and Western Australia (+1.0 per cent), highlighting the uneven impact that the Delta variant outbreak is having on occupational groups around the country.

• Perhaps another indicator of the recent strength in job hiring demand is the operational performance of ASX-listed online job advertisement giant SEEK. Shares of SEEK are hovering near record highs, but the company is trading ex-dividend today. A few weeks ago, SEEK announced its financial year 2021 results, reporting a 58 per cent jump in net profits after tax to $141 million. A strong rebound in job ad volumes to all-time highs in both Australia and New Zealand saw revenue in the region grow by 40 per cent to $541 million over the year. But the company warned that it continues to experience volatility in hiring demand due to localised Covid-19 Delta outbreaks.

What do you need to know?

Preliminary skilled job vacancies – August

• The National Skills Commission reported preliminary skilled job vacancies fell by 5.6 per cent (12,828 job ads) to 216,031 available positions in August. While it was the third monthly decline after reaching a 12½-year high in May (240,039 ads), recruitment activity is still up 55.6 per cent (or 77,177 ads) when compared to a year ago. And vacancies are still up 35.7 per cent (or 56,820 jobs) when compared to pre-Covid-19 levels in February 2020.

• Skilled vacancies by state/territory in August: NSW (-9.2 per cent); Victoria (-5.9 per cent); Queensland (-5.9 per cent); South Australia (+1.1 per cent); Western Australia (+1.0 per cent); Tasmania (-2.2 per cent); Northern Territory (+2.3 per cent); and the ACT (-9.0 per cent).

• The more detailed data on regions and occupations is scheduled for September 22.

Labour account – June quarter

• The Bureau of Statistics (ABS) has released a report detailing developments in the job market over the June quarter. (The latest labour force report is July 2021).

Multiple jobs

• In seasonally adjusted terms in the June quarter, the proportion of employed people working multiple jobs increased to 6.5 per cent, continuing to rebound from a record low of 4.9 per cent in the June quarter of 2020. In the June quarter of 2021, the number of multiple job holders hit a 27-year high of 867,900 people after falling to an 8-year low of 622,600 persons a year ago. In the June quarter, the largest increases in the multiple job holding rate were in Administrative and support services, Arts and recreation services and Education and training.

Secondary jobs

• According to the Bureau of Statistics, “Secondary jobs are where a person is working more than one job at the same time, and may consist of one or more additional jobs. These jobs can be held by people who have their main job in the same or a different industry.”

• In seasonally adjusted terms in the June quarter, secondary jobs increased by 15,100 (or 1.4 per cent). The proportion of secondary jobs to filled jobs was 7.5 per cent in the quarter, the same as the March quarter.

• The three industries with the highest number of secondary jobs were Administrative and support services (291,500), Health care and social assistance (138,400) and Education and training (105,100).

Payments

• According to the Bureau of Statistics, the “Labour Account Payments quadrant presents the costs incurred by enterprises in employing labour, and the incomes received by people from its provision. Total income consists of compensation of employees and labour income from self-employment. The addition of other related costs to employers to total income will derive total labour costs.”

• In seasonally adjusted terms in the June quarter, total labour income increased by $3,606 million (+1.3 per cent) to $275,287 million. The average labour income per employed person rose by 0.6 per cent to $20,704. Total compensation of employees lifted by 1.8 per cent to $251,044 million.

• Labour income from self-employment fell by 2.9 per cent to $24,243 million. Total labour costs increased by $11,755 million (+4.1 per cent) to $295,373 million.

• And the three industries with the highest total labour income in the quarter were Health care and social assistance ($36.9 billion), Professional, scientific and technical services ($31.7 billion), and Construction ($24.3 billion).

Published by Ryan Felsman, Senior Economist, CommSec