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Job vacancies and retail spending well off the lows
Retail trade; Regional jobs; Job vacancies

¾ Retail trade: ‘Preliminary’ retail trade fell by 1.5 per cent in September after falling 4.0 per cent in August. Retail spending is still up 5.2 per cent on the year.

¾ Regional payrolls: The Australian Bureau of Statistics (ABS) today released regional data on payrolls. Victoria dominates the regions that recorded the biggest falls in payroll numbers since mid-March. The smallest declines in payrolls can be found across Western Australian and NSW regions.

¾ Skilled job vacancies: In seasonally adjusted terms, the Internet Vacancy Index (IVI) increased by 6.4 per cent (or 8,700 job advertisements) in September 2020 to stand at 144,000. Job ads are still 12.2 per cent (or 19,900 advertisements) below the level recorded in September 2019.-

Retail trade data is important for consumer-focussed companies. The payroll and wage data helps government with decisions on assistance measures for households and businesses. Skilled vacancies highlights the strength of the job market and has implications for placement agencies and retailers.

What does it all mean?

· The job market continues to bounce back. Vacancies rose by over six per cent in the latest month with gains in each state and territory. In addition, job ads are up on a year ago in half of the states and territories. There are available positions to be filled across the nation – especially in industries previously reliant on international workers – providing opportunities to all those receiving JobSeeker or JobKeeper payments.

· Volatility continues to be the norm in the monthly retail spending data results. But in the seven months since March, spending has averaged gains of 1.2 per cent a month, and averaged gains of 0.9 per cent over 2020 as a whole. And spending rebounded quite smartly in the September quarter, up almost seven per cent after falling by over two per cent in the previous three months. Clearly retail spending has held up far better than most initially thought, courtesy of federal, state and territory support/stimulus payments and greater mobility outside of Victoria.

· Western Australia is benefitting from its relative success in ‘flattening the Covid curve’. Six of the 15 regions with the smallest declines in payrolls since mid-March can be found in Western Australia with five found in NSW with three in Queensland.

· At a regional level Lithgow-Mudgee and Armidale in NSW both stand out with the smallest job falls in the past seven months.

What do the figures show?

‘Preliminary’ retail trade – September

· ‘Preliminary’ retail trade fell by 1.5 per cent in September after falling 4.0 per cent in August. Retail spending is still up 5.2 per cent on the year and 4.6 per cent above pre-COVID-19 levels in February. The final September data is scheduled for November 4.

· According to the ABS, “There were falls in turnover in Food retailing, Household goods retailing, and ‘Other’ retailing, in September. Despite the month-on-month falls, these industries continue to trade at levels above September 2019.

· Every state and territory, except the Northern Territory, fell this month. NSW, Queensland, Western Australia, and South Australia, led the month-on-month falls.

· Victoria recorded a minor fall in September following a fall of 12.6 per cent in August when the Stage-4 restrictions in Melbourne, and Stage-3 restrictions in regional Victoria were introduced. Victoria is the only state where turnover remains below levels recorded in September 2019.

· In seasonally adjusted current price terms, the preliminary estimate shows the September quarter rose 6.8 per cent. This follows a fall of 2.3 per cent in the June quarter. Quarterly volume estimates will be included in the final release on 4 November 2020.”

Regional payrolls – Week ending October 3

· The Australian Bureau of Statistics (ABS) has released the regional (SA4) payroll indexes.

· Between March 14 (date of 100th case of COVID-19) and October 3, payrolls fell most in Melbourne – Inner (-10.1 per cent). Thirteen of the 15 regions with the biggest declines in payrolls can be found in Victoria. Sydney’s City and Inner South also feature with payrolls down 7.6 per cent for the period.

· Of the 15 regions with the smallest declines in payrolls over the period, six can be found in Western Australia. Perth’s South-West recorded just a 1.4 per cent fall in payrolls from March 14 to October 3.

· Five of the 15 regions with the smallest declines in payrolls can be found in NSW with three in Queensland in addition to Darwin.

· At a finer SA3 region level, amongst best performers since mid-March (smallest fall in jobs) were Lithgow-Mudgee (NSW, -0.2 per cent); West Pilbara (WA, -0.9 per cent) and Armidale (NSW, -0.9 per cent).

Skilled job vacancies – September

· In seasonally adjusted terms, the Department of Education, Skills and Employment Internet Vacancy Index (IVI) increased by 6.4 per cent (or 8,700 job advertisements) in September 2020 to stand at 144,000. Job ads are still 12.2 per cent (or 19,900 advertisements) below the level recorded in September 2019.

· Job advertisements increased in seven of the eight broad occupational groups in September 2020 and remained steady in the other. Over the month, the strongest gains were recorded for Technicians and Trades Workers, with recruitment activity up by 9.6 per cent (or 1,800 job advertisements), followed by Sales Workers 7.2 per cent (730 job advertisements), Managers 7.0 per cent (990 job advertisements), Professionals 6.7 per cent (2,900 job advertisements) and Labourers 6.1 per cent (610 job advertisements).

· Over the year to September, job advertisements fell for six of the eight occupational groups. The strongest falls were for Clerical and Administrative Workers and Managers, both occupational groups recording declines of 27.5 per cent (or down by 7,600 and 5,700 job advertisements respectively) over the year. Other occupational groups to record large falls over the year include Sales Workers (down by 10.5 per cent or 1,300 job advertisements), Professionals (9.9 per cent or 5,000 job advertisements) and Technicians and Trades Workers (7.3 per cent or 1,600 job advertisements).

· Recruitment activity for both Labourers and Machinery Operators and Drivers now exceeds pre COVID-19 levels.

· All states and both territories recorded an increase in job advertisements in September: NSW (up 7.1 per cent); Victoria (up 11.9 per cent); Queensland (up 3.4 per cent); South Australia (up 1.7 per cent); Western Australia (up 4.3 per cent); Tasmania (up 0.8 per cent); Northern Territory (up 13.9 per cent); ACT (up 0.3 per cent).

· Over the year to September, job ads increased in four of the eight states and territories: NSW (down 11.3 per cent); Victoria (down 36.0 per cent); Queensland (down 2.0 per cent); South Australia (up 12.7 per cent); Western Australia (up 16.3 per cent); Tasmania (up 0.3 per cent); Northern Territory (up 16.4 per cent); ACT (down 15.5 per cent).

· Job advertisements in South Australia, Western Australia, Tasmania and the Northern Territory now exceed pre-COVID-19 levels.

· Regions: Over the year to September 2020, in three month moving average terms, job advertisements increased in 24 of the 37 IVI regions. Dubbo & Western NSW recorded the strongest increase in job advertisements over the year (up by 72.9 per cent), followed by South West WA (44.6 per cent), Southern Highlands & Snowy NSW (44.2 per cent), Tamworth and North West NSW (34.6 per cent) and Riverina & Murray NSW (31.4 per cent).

What is the importance of the economic data?

· The ABS now provides preliminary estimates for Australian retail turnover. “This estimate is compiled from the monthly Retail Business Survey and is based on preliminary data provided by businesses that make-up approximately 80 per cent of total retail turnover and is therefore subject to revision.”

· The ABS data Weekly payroll jobs and wages “provides indicative information on the economic impact of the COVID-19 coronavirus on employees, including changes in employee jobs, changes in total wages, and changes in average weekly wages per job.”

· The Department of Employment releases a monthly Internet Vacancy Index. The index is based on a count of online job advertisements newly lodged on three main job boards (SEEK, CareerOne and Australian JobSearch) during the month. The index is the only publicly available source of detailed data for online vacancies, including around 350 occupations (at all skill levels), as well as for all states/territories and 37 regions.

What are the implications for investors?

· The recovery path remains bumpy, but the economic recovery is well underway as the Reserve Bank Governor has recently indicated. There are more jobs to be filled and retail spending remains solid.

· The Reserve Bank is keen on adding momentum to the recovery with more monetary stimulus. The aim is to get more people back into work and back quickly.

Published by Craig James, Chief Economist, CommSec