Job vacancies; Engineering construction; Credit/debit cards

  • Job vacancies: In seasonally adjusted terms, job vacancies rose by 23.4 per cent or 48,300 to a record high 254,400 available positions in the three months to November. Vacancies are 12.1 per cent higher in November than a year ago. And available positions are 27,100 or 11.9 per cent higher than pre-pandemic levels in February 2020. There were 228,800 private sector and 25,600 public sector vacancies in November.
  • Job vacancies by sectors: In original terms, all 18 industries recorded higher vacancies in the three months to November. Vacancies rose the most in Health Care and Social Assistance (up 9,300), followed by Accommodation and Food Services (up 8,900) and Retail Trade (up 7,200). But vacancies rose the least for Education and Training (up 300); Information Media and Telecommunications (up 300); and Electricity, Gas, Water and Waste Services (up 300).
  • Engineering construction: Engineering construction work done fell by 1.7 per cent in real (inflation-adjusted) terms in the September quarter. But work done was still up 1.9 per cent on a year ago. The value of outstanding non-resource projects rose from $45.5 billion in the June quarter to $46.3 billion in the September quarter, but this was still below the record high of $50.7 billion in the March quarter.
  • Card purchases: According to the Reserve Bank, by value the sum of credit & debit card purchases rose by 8.0 per cent in November. Card purchases were up 8.7 cent on the year.

The job vacancies data is a leading indicator of the job market and therefore important for consumer-focussed stocks and companies. The engineering data has implications for banks, retailers, developers, building and building material companies. The credit & debit card spending data provides guidance for consumer-focussed businesses.  

What does it all mean?

  • Labour market conditions across Australia continue to improve, despite Covid-19 restrictions. Job vacancies – as measured by the Bureau of Statistics (ABS) – lifted by a whopping 23.4 per cent in the three months to November 2020 after surging by a record 76,900 positions or 59.5 per cent in the quarter ended August 2020. The rebound follows an historic 43.2 per cent plunge in recruitment in the three months to May 2020 due to the nationwide pandemic lockdown.
  • Incredibly, national job vacancies were 12.1 per cent higher in November than a year ago and 11.9 per cent above pre-pandemic levels in February 2020. In original terms, available positions are back above pre-pandemic levels in all states and territories except Victoria.
  • Private sector job vacancies rose by 24.2 per cent over the three months to November to be up by 12.9 per cent over the year. And vacancies in the public sector rose by 16.9 per cent to be 4.8 per cent higher than a year ago. There were 228,800 private sector and 25,600 public sector vacancies in November. Both sector’s vacancies are now above pre‑Covid levels.
  • By industry, vacancies rose most over the three months to November Health Care and Social Assistance (up 9,300), followed by Accommodation and Food Services (up 8,900) and Retail Trade (up 7,200) as Covid-19 restrictions eased.
  • Yesterday the Reserve Bank issued the November data on credit and debit card lending figures. The results are in line with retail trade data released on Monday and the timelier Commonwealth Bank credit and debit card figures that cover the period through to January 8. Overall, Aussies spent freely during November with the annual increase in debit card purchases the highest in the 18-year data history. But the value of withdrawals at Australian ATMs in November fell for the fourth successive month in November to 5-month lows. So there is less evidence of cash hoarding and more signs of purchases made by card rather than cash.
  • Engineering construction is healthy but more work can be taken on. The current data doesn’t show the new projects advanced by federal, state and territory governments in budgets handed down since October. The additional work should provide a useful boost to economic momentum in 2021 and beyond.

What do the figures show?

Job vacancies – November

  • In seasonally adjusted terms, job vacancies rose by 23.4 per cent or 48,300 to 254,400 available positions in the three months to November. Vacancies are 12.1 per cent higher in November than a year ago. And available positions are 27,100 or 11.9 per cent higher than pre-pandemic levels in February 2020.
  • In seasonally adjusted terms, over the three months to November changes in vacancies across states and territories were: NSW (up 32.9 per cent); Victoria (up 27.6 per cent); Queensland (up 13.7 per cent); South Australia (up 24.6 per cent); Western Australia (up 16.2 per cent); Tasmania (up 50.4 per cent); Northern Territory (up 0.1 per cent) and ACT (up 40.4 per cent).
  • Vacancies rose by 51,200 or 24.6 per cent in original terms in the three months to November. In terms of industries, all 18 industries recorded higher vacancies. Vacancies rose the most in Health Care and Social Assistance (up 9,300), followed by Accommodation and Food Services (up 8,900) and Retail Trade (up 7,200). But vacancies rose the least for Education and Training (up 300); Information Media and Telecommunications (up 300); and Electricity, Gas, Water and Waste Services (up 300).
  • In seasonally adjusted terms, annual changes in vacancies across states and territories were: NSW (up 3.1 per cent); Victoria (down 2.9 per cent); Queensland (up 22.4 per cent); South Australia (up 36.9 per cent); Western Australia (up 45.3 per cent); Tasmania (up 42.1 per cent); Northern Territory (up 22.1 per cent) and ACT (up 2.3 per cent).
  • In the year to November, vacancies rose by 27,800 or 12.0 per cent in original terms. Thirteen out of 18 industries recorded higher vacancies. Vacancies rose the most in Health Care and Social Assistance (up 9,700), followed by Accommodation and Food Services (up 7,900); Manufacturing (up 4,400); and Public Administration and Safety (up 3,800). But vacancies fell the most for Administrative and Support Services (down 7,700); Other Services (down 800); Education and Training (down 600); and Information Media and Telecommunications (down 600).
  • By sector in seasonally adjusted terms, private sector job vacancies rose by 24.2 per cent over the three months to November to be up by 12.9 per cent over the year. And vacancies in the public sector rose by 16.9 per cent to be 4.8 per cent higher than a year ago. There were 228,800 private sector and 25,600 public sector vacancies in November.

Engineering work – September quarter

  • Engineering construction work done fell by 1.7 per cent in real (inflation-adjusted) terms in the September quarter. But work done is still up 1.9 per cent on a year ago.
  • The value of work done for the private sector fell by 4.2 per cent but was still 1.4 per cent higher than a year ago.
  • The value of work done for the public sector rose by 2.1 per cent in the September quarter to be up by 2.6 per cent from a year ago.
  • Engineering construction work rose in four of the states and territories in the September quarter: NSW (down by 3.0 per cent); Victoria (down by 3.8 per cent); Queensland (down by 1.8 per cent); South Australia (up by 0.1 per cent); Western Australia (down by 1.2 per cent); Tasmania (up by 11.6 per cent); Northern Territory (up by 6.7 per cent); ACT (up by 2.1 per cent).
  • In the year to September, engineering construction work rose in three of the states and territories: NSW (down by 3.6 per cent); Victoria (up by 1.8 per cent); Queensland (down by 0.1 per cent); South Australia (down by 2.2 per cent); Western Australia (up by 17.3 per cent); Tasmania (down by 14.4 per cent); Northern Territory (up by 2.4 per cent); ACT (down by 7.8 per cent).
  • The value of engineering work yet to be done fell further from the 5-year highs of $76.7 billion in the March quarter, down from $69.6 billion in the June quarter to $67.4 billion in the September quarter. Commencements fell from $78.8 billion to a 2½-year low of $77.2 billion in the September quarter.
  • The value of outstanding non-resource projects rose from $45.5 billion in the June quarter to $46.3 billion in the September quarter but was still below the record high of $50.7 billion in the March quarter.
  • Work yet to be done on bridges stands at an 11½-year high ($0.9 billion); water supply & storage at 8-year highs (3.4bn); sewerage & drainage at 6½-year highs ($1.6bn); and recreation at 5½-year highs of $0.9bn.

Credit and debit card lending – November

  • The average credit/charge card balance rose by $139.19 or 5.1 per cent to $2,867.59 in November. But the average limit fell by $7.35 or 0.1 per cent to $9,861.03 in November. The average limit has fallen 0.1 per cent for each of the past seven months.
  • The number of credit and charge card purchases rose by 4.3 per cent in seasonally adjusted terms in November to be up 0.9 per cent on the year. The value of purchases made with credit and charge cards rose by 7.8 per cent in November but was down by 6.2 per cent on a year ago.
  • The number of overseas purchases rose by 15.7 per cent in November but were down 38.8 per cent on the year. The value of overseas purchases rose by 19.0 per cent in November but were down 53.2 per cent on the year.
  • The number of debit card purchases rose by 8.0 per cent in November to be up 17.2 per cent on the year. The value of debit card purchases rose by 8.2 per cent to be up a record 23.3 per cent on the year.
  • By value, the sum of credit & debit card purchases rose by 8.0 per cent in November. Card purchases were up 8.7 cent on the year. Smoothed annual growth (12-month average) rose from 1.0 per cent to 1.2 per cent.
  • The number of credit and charge card accounts stood at a 12-year low of 13.67 million in November, down from 13.72 million in October. Accounts are down 7.1 per cent on the year.
  • The number of debit card accounts rose by less than 0.1 per cent to 34.87 million in November. Accounts are up 3.0 per cent on the year.
  • The number and value of ATM transactions continues to fall. The number of ATM withdrawals in November was down by 27.1 per cent on the year with the value down by 18.3 per cent.

What is the importance of the economic data?

  • The Australian Bureau of Statistics releases Job Vacancies data each quarter. The data is useful in gauging the strength of the job market.
  • The ABS releases detailed data on engineering construction work each quarter. The data provides insights into activity for building and construction companies, civil engineering businesses, building material suppliers and associated businesses.
  • The Reserve Bank releases data on credit and debit card transactions each month. The credit card figures are useful in highlighting consumer borrowing and spending trends.

What are the implications for interest rates and investors?

  • The sharp rebound in the ABS measure of job vacancies is consistent with strong gains in timelier monthly indicators of job hiring intentions. In December, ANZ job ads were 4.1 per cent above pre-pandemic levels in February 2020. The pick-up in labour demand bodes well for an expected job market recovery in 2021, although the tapering of JobKeeper payments, state border closures and renewed virus lockdowns pose downside risks.
  • Work outstanding on non-resource engineering projects remains at lofty levels but arguably more work can be taken on. All states and territories increased spending on infrastructure in recent budgets. But the projects are yet to show up in the data. The outlook for construction-dependent firms and sectors remains favourable.

Published by Craig James, Chief Economist and Ryan Felsman, Senior Economist, CommSec