Job advertising slowed markedly in August due to the start of Victoria’s stiff coronavirus restrictions, cutting short the solid rebound in the previous two months.

ANZ’s jobs ads series rose just 1.6 per cent in August following a 19.1 per cent spike in July, to be still 27 per cent down from their pre-pandemic levels in February and 30 per cent down on the year.

ANZ senior economist Catherine Birch said with Victoria accounting for more than 26 per cent of the nation’s pre-pandemic employment, the stage four restrictions in Melbourne and stage three in regional Victoria have undoubtedly put the brakes on job advertising.

Job ads are a pointer to future employment growth.

“We expect outright falls in national employment in August and September,” Ms Birch said.

She said the December quarter is also looking worrying, given the amount of fiscal support to workers, businesses and households scheduled to be withdrawn, particularly with Victoria only gradually emerging from lockdowns.

The number of people unemployed has risen to over one million because of the pandemic, with predictions that another 400,000 jobs could go before Christmas.

Victoria’s battle with COVID-19 also saw activity in the services sector sink further in August.

The Australian Industry Group’s performance of services index fell 1.5 points to 42.5 in August, remaining below the 50-mark which separates contraction in the industry from expansion.

“The introduction of stage four restrictions in the greater Melbourne area following some optimism in July weighed heavily on business activity in Victoria and the impact was felt across other states,” Ai Group said on Monday.

“Lower customer demand, increased activity restrictions and uncertainty all contributed to the deterioration in services activity in August.”

Ai Group’s business index also fell 2.1 points to 42.6 in August.

Business conditions remained negative across most sectors, but some bright spots persisted in food-related manufacturing, distribution and retailing

The Ai Group reports do not take into account the Victorian government’s decision on Sunday to extend the lockdown for another two weeks with only minor tweaks, and beyond that restrictions will only gradually be lifted.

Business Council of Australia chief executive Jennifer Westacott said while Premier Daniel Andrews’ plan provided some welcome news, the state is still a long way from where it needs to be.

“Being a long way from where we need to be compared to other states like New South Wales, means more job losses, more businesses failings,” she told Network Seven’s Sunrise program.

She suspects some businesses will start leaving Victoria.