There are some modest signs of improvement in Victoria’s jobs market after suffering the impact of its harsh COVID-19 lockdown.

New Australian Bureau of Statistics figures show payroll jobs rose by 0.4 per cent in the state over the fortnight to September 19. Over the same period, jobs increased 0.3 per cent nationally.

However, payrolls nationally remain around 4.1 per cent lower than in mid-March when the coronavirus first started to hit the Australian economy and are eight per cent lower in Victoria.

The data came a day after Treasurer Josh Frydenberg handed down a big spending budget aimed at lifting the economy out of its first recession in nearly three decades and getting people back into work.

Still, Treasury anticipates the unemployment rate rising to eight per cent by the end of the year compared to the 6.8 per cent rate in August.

It does not expect it to fall below six per cent until the 2023/24 financial year.

Meanwhile, the services industry remains under a cloud due to COVID-19 restrictions and border closures in parts of the country.

The Australian Industry Group performance of services index fell by 6.3 points to 36.2 points in September, indicating a faster pace of contraction in the sector than in August with the index remaining well below 50 points.

“The muted optimism seen in July diminished across August and September,” the Ai Group said.

“All indicators were firmly negative in September, with the indices for sales, new orders and supplier deliveries decreasing significantly from the previous month.”

More broadly, the group’s business performance index also fell by 4.5 points to 38.1 points in September, again indicating a further contraction in activity.

Ai Group chief executive Innes Willox said the fall is further evidence of the fragility of the domestic economy and of the rocky road to recovery.

“With the manufacturing, construction and services indexes all pointing to further weakness in September, the stimulus provided to the economy in last night’s budget is timely and commensurate with the difficult task at hand,” he said.