Jobs plunge in Western Sydney; Small business jobs fall most

Weekly payroll jobs and wages; Used vehicle prices

What happened? The Bureau of Statistics (ABS) reported that national payroll jobs fell by 0.7 per cent over the fortnight to August 14, 2021 with total wages down 1.0 per cent. Payroll jobs declined in Greater Sydney (-1.5 per cent), followed by Greater Brisbane (-1.1 per cent) and Greater Melbourne (-1.0 per cent). But payroll wages rose in Greater Adelaide (+1.4 per cent). Since June 26, 2021 payrolls jobs have plunged 13.7 per cent in Sydney – Inner South West, followed by Sydney South-West (-13.5 per cent) and Parramatta (-11.5 per cent).

Implications: Covid-19 lockdowns across multiple capital cities have led to increased scrutiny of high frequency weekly payroll jobs data. Already indicators of labour demand, such as the SEEK job advertisements series have weakened in NSW, Victoria and the ACT. But Covid-19 Disaster Payments may limit the overall damage to the labour market, alongside solid job hiring intentions in “Covid-free” regions. That said, hours worked have fallen sharply with the both the unemployment and underemployment rates expected to have risen.

Other data: Used vehicle prices rose by 17.7 per cent in the year to August, down from 27.2 per cent in the year to July. Second-hand car prices were up 18.5 per cent on a year ago with truck prices 13.1 per cent higher.

The payroll and wage data helps government with decisions on assistance measures for households and businesses. Used vehicle price data provides a guide to supply and demand for companies in the auto and components sector.

What does it mean?

• Covid-19 lockdowns across major Aussie capital cities have led to increased scrutiny of high frequency Bureau of Statistics (ABS) and Australian Taxation Office (ATO) weekly payroll jobs data. Of course, the epicentre of the recent Delta variant outbreak – Greater Sydney – has been hardest hit by job losses since the city’s almost 12-week lockdown began. Between June 26 and August 14, 2021, payrolls jobs in Greater Sydney have plunged by 10.1 per cent to be 7.8 per cent below levels on March 14, 2020 when Australia recorded its 100th confirmed case of Covid-19.

• With Western Sydney incurring harsher government restrictions than the rest of the city, including nightly curfews, payrolls jobs have fallen most in these SA4 regions. Between June 26 and August 14, 2021 payrolls jobs plunged 13.7 per cent in Sydney – Inner South West, followed by Sydney South-West (-13.5 per cent), Parramatta (-11.5 per cent) and Sydney – Inner West (-10.1 per cent). All SA4 regions in Greater Sydney have seen large job losses, including the nearby Central Coast (-8.5 per cent) and Illawarra (-8.2 per cent) regions.

• Over the fortnight to August 14, 2021, payroll jobs declined most in Greater Sydney (-1.5 per cent), followed by Greater Brisbane (-1.1 per cent) and Greater Melbourne (-1.0 per cent). But payroll wages rose in Greater Adelaide (+1.4 per cent). Regionally, payroll jobs fell by 0.9 per cent in Queensland, followed by NSW and Tasmania (both -0.6 per cent).

• Of course, payroll jobs decreased by the most over the fortnight to August 14, 2021 in Accommodation and food services (-4.4 per cent), and Arts and recreation services (‑3.6 per cent).

• And small businesses with fewer than 20 employees (-3.7 per cent) were laying-off or standing down the most workers over the fortnight to August 14, 2021. Smaller firms have reduced payrolls by 4.1 per cent over the past year, while larger businesses with 200 or more employees have actually increased payroll jobs by 2.8 per cent, highlighting the uneven impact of the pandemic on Aussie companies.

• The damage to the labour market is broad-based. By gender, female and male payroll jobs were both down 0.7 per cent over the fortnight to August 14, 2021. And payroll jobs worked by people aged 15-19 years decreased by 3.0 per cent, once again the hardest hit by job losses in the teenage-focused hospitality and retail trade sectors.

• Forward-looking indicators of labour demand, such as the SEEK measure of job advertisements have also weakened in August. The online job hiring company reported today that job ads were down 5.3 per cent with applications per job falling 1.3 per cent in the month.

• According to SEEK, job vacancies fell by the most in the ACT (-11.9 per cent), followed by NSW (-10.7 per cent), Victoria (-6.3 per cent) and Queensland (-5.0 per cent) due to lockdowns, government restrictions and a slowing in economic activity. Once again, the “Covid-19 free” economies of Tasmania (+2.8 per cent), Northern Territory (+2.7 per cent), South Australia (+2.4 per cent) and Western Australia (+0.3 per cent) all saw a lift in recruitment activity.

• In August, Hospitality & tourism (-19.0 per cent), Trades & services (-7.3 per cent), and Retail and consumer products (-8.9 per cent) industries saw the biggest declines in job ad volumes.

• Commonwealth Bank (CBA) Group economists expect that the official August labour force data will show around 300,000 lob losses with the unemployment rate lifting from 4.6 per cent to 5.2 per cent and the participation rate down from 66.0 per cent to 64.9 per cent. Hours worked will also fall sharply with a lift in underemployment.

What do you need to know?

Weekly payrolls – Fortnight ended August 14, 2021

• The Bureau of Statistics (ABS) reported that national payroll jobs fell by 0.7 per cent over the fortnight to August 14, 2021 but were still up 1.6 per cent on a year ago.

• Total wages fell by 1.0 per cent over the fortnight to August 14 to be up 4.9 per cent on a year ago.

• By gender, female and male payroll jobs were both down 0.7 per cent over the fortnight to August 14. Payroll jobs worked by people aged 15-19 years decreased by 3.0 per cent.

• Over the fortnight to August 14, the biggest payroll job losses were in the NSW (-1.2 per cent), followed by Queensland (-1.0 per cent), the ACT (-0.7 per cent), Victoria (-0.6 per cent) and Tasmania (-0.5 per cent). But payrolls were flat in Western Australia and higher in South Australia (+1.5 per cent) and the Northern Territory (+0.2 per cent).

• By industry, payroll jobs decreased by the most over the fortnight to August 14 in Accommodation and food services (-4.4 per cent) and Arts and recreation services (-3.6 per cent).

• By employment size, payroll jobs decreased by the most over the fortnight to August 14 for businesses with less than 20 employees (-3.7 per cent), followed by firms with 20-199 employees (-0.8 per cent). But businesses with 200 or more employees increased payroll jobs by 1.0 per cent.

Datium Insights-Moody’s Analytics Used Vehicle Price Index – August

• Moody’s Analytics reported: “Australian used-vehicle price appreciation further decelerated in August. The Datium Insights-Moody’s Analytics Used Vehicle Price Index increased by 17.7 per cent on a year-earlier basis in August, compared with 27.2 per cent in the month prior. Car prices rose by 18.5 per cent while truck prices increased by 13.1 per cent.

• Vehicle retention value, measured as price/manufacturer suggested retail price, rose by 15.2 per cent compared with a year earlier, with the car component increasing by 17.2 per cent and the truck component rising by 12.9 per cent.”

Published by Ryan Felsman, Senior Economist, CommSec