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Most jobs added in Professional, Scientific & Tech services
Job vacancies lift; Record iron ore exports; Weak credit growth
Private Sector Credit; International trade; Job vacancies; Employment by industry

Lending: Private sector credit (effectively outstanding loans) rose by 0.1 per cent in November (consensus: +0.1 per cent) to be up 1.7 per cent over the year – the weakest annual growth rate in 10½ years. Business credit was down 0.2 per cent, but was up 0.9 per cent over the year – the weakest annual pace in 8½ years.

Preliminary merchandise trade: In original terms, the value of exports of goods rose by 0.6 per cent to $30.5 billion in November to be 4.1 per cent lower than a year ago. The value of goods imported was up 11.3 per cent to $28.6 billion and was 10.1 per cent higher when compared to a year ago. Rolling annual exports of iron ore (metalliferous ores & metal scrap) hit a record $139.1 billion.

Skilled job vacancies: In seasonally adjusted terms, the Internet Vacancy Index (IVI) increased by 7.8 per cent (or 12,300 job advertisements) – the seventh successive increase – in November to stand at 169,900 available positions. Job ads are 11.2 per cent (or 17,100 advertisements) above the level recorded in November 2019.

Employment by industry: In seasonally adjusted terms, employment rose by 248,800 in the three months to November. Jobs rose in 13 of the 19 major industry sectors. Jobs rose by the most in Professional, Scientific and Technical Services (up 80,200). But most jobs were lost in Wholesale Trade (down 23,100).

Private sector credit figures have implications for finance providers, retailers, and companies dependent on business spending. The trade data is instructive on income flows in the economy and consumer and business activity and has implications for the currency. Skilled vacancies highlights the strength of the job market and has implications for placement agencies and retailers. The data on employment by industry gives insights into which industries are growing the fastest as well as insights on the performance of the broader economy.

What does it all mean?

• The Australian Bureau of Statistics (ABS) released their quarterly labour market figures today, which includes a breakdown of jobs by industry. The data runs to November so includes the easing of Covid-19 restrictions in Victoria and the brief lockdown in South Australia. Encouragingly, there were strong job gains recorded over the three-month period with employment up by 248,800. Jobs rose in 13 of the 19 major industry sectors, led by gains in Professional, Scientific and Technical Services (+80,200), Administration and Support Services (+53,300) and a continued recovery in Accommodation and Food Services (+45,800) positions.

• But it wasn’t all good news – astonishingly, 22,700 jobs were lost in the Health Care and Social Assistance industry, despite the coronavirus health crisis! And 23,100 jobs were lost in Wholesale Trade. Jobs were also shed in Agriculture, Forestry and Fishing (-19,900), Rental, Hiring and Real Estate Services (-18,900), and Manufacturing (-16,400) – serving to highlight the uneven nature of the pandemic labour market shock.

• The Health Care and Social Assistance (1.8 million or 13.6 per cent) sector remained Australia’s largest employer in November. Retail Trade (1.3 million or 10 per cent), Professional, Scientific and Technical Services (1.2 million or 9.3 per cent), and Construction (1.2 million or 9.2 per cent) fill the other top places for Aussie jobs.

• Employer hiring intentions have improved since the depths of the pandemic crisis in April. In fact, skilled internet job vacancies have lifted for seven successive months with almost 170,000 available jobs posted in November. Victorian vacancies surged by 24.2 per cent in the month as the economy emerged from lockdown. Amazingly, recruitment activity is up 11.2 per cent over the year to November, despite the sharp economic downturn. Annual vacancies were up a staggering 33.3 per cent in Tasmania, with gains of 18 per cent or more in Queensland, the Northern Territory, South Australia and Western Australia.

• China’s trade sanctions against Australia and weakening global demand for our goods during the global pandemic recession have shown up in the November preliminary trade data. Exports of goods are down 4.1 per cent when compared to a year ago. And Australia’s annual exports to China are 0.4 per cent lower at $145.79 billion. Australia’s rolling annual trade surplus with China fell from $64.51 billion in October to a 16-month low of $62.86 billion in November. That said, China’s demand for iron ore remains strong with rolling annual exports of iron ore (metalliferous ores & metal scrap) hitting a record-high $139.1 billion in the month.

What do the figures show?

Private sector credit – November

• Private sector credit (effectively outstanding loans) rose by 0.1 per cent in November (consensus: +0.1 per cent) to be up 1.7 per cent on the year. Annual growth of lending is at a 10½-year low.

• Housing credit grew by 0.3 per cent to be up 3.4 per cent on the year with owner-occupier housing credit up by 0.5 per cent (+5.4 per cent annual) and investor housing credit up 0.1 per cent (-0.1 per cent annual).

• Personal credit was flat, but still down 12.4 cent lower over the year.

• Business credit fell by 0.2 per cent, but was still up 0.9 per cent over the year (8½-year low).

• The M3 money aggregate lifted by 0.8 per cent in the month to be up 12.5 per cent from a year ago – the strongest annual growth rate in 11 years.

• Broad Money rose by 0.9 per cent to be up 12.4 per cent from a year ago – the strongest annual growth rate in 12 years.

• Loans and advances by banks grew by 2.1 per cent (record 40½-year low). Loans by all financial institutions were up by 2.0 per cent (27½-year low).

• The APRA authorised deposit-taking institutional statistics detailing loans to households via credit cards was not published.

Preliminary international trade – November

• According to the Bureau of Statistics (ABS), in original terms, the value of exports of goods rose by 0.6 per cent to $30.5 billion in November to be 4.1 per cent lower than a year ago.

• According to the ABS, the “key drivers of the increase were a $746 million (39 per cent) increase in exports of non-monetary gold, mostly to Singapore, and a $368 million (16 per cent) increase in exports of gas.”

• The value of goods imported was up 11.3 per cent to $28.6 billion and was 10.1 per cent higher when compared to a year ago.

• According to the ABS, “This is the fifth highest monthly imports value on record. It was driven by transport equipment, up $1.1 billion (462 per cent), almost all of which was aircraft from Australia’s second largest imports source country, the United States of America”.

• In the year to November the goods trade surplus (exports less imports) was $68.6 billion, down from the record high of $87.3 billion in April.

• Australia’s annual exports to China fell from $146.57 billion in October to $145.79 billion in November. Exports to China are down 0.4 per cent on a year ago.

• Australia’s annual imports from China lifted from $82.07 billion in October to $82.92 billion in November. Annual imports were up 5.6 per cent on a year ago.

• Australia’s rolling annual trade surplus with China fell from $64.51 billion in October to a 16-month low of $62.86 billion in November.

Skilled internet job vacancies – November

• In seasonally adjusted terms, the Internet Vacancy Index (IVI) increased by 7.8 per cent (or 12,300 job advertisements) – the seventh successive increase – in November to stand at 169,900 available positions. Job ads are 11.2 per cent (or 17,100 advertisements) above the level recorded in November 2019.

• Job advertisements increased in all eight broad occupational groups in November. The strongest gains were recorded for Machinery Operators and Drivers, with recruitment activity up by 12.7 per cent (or 1,100 job advertisements), followed by Clerical and Administrative Workers (12.3 per cent or 2,700 job advertisements), Community and Personal Service Workers (11.0 per cent or 1,700 job advertisements), Labourers (11.0 per cent or 1,300 job advertisements) and Technicians and Trades Workers (9.8 per cent or 2,200 job advertisements).

• Job advertisements declined for two of the eight occupational groups over the year to November, with falls recorded for Managers (down 7.8 per cent or 1,500 job advertisements) and Clerical and Administrative Workers (down 1.1 per cent or 290 job advertisements). But the strongest increases were recorded for Labourers (up 46.3 per cent or 4,200 job advertisements), followed by Machinery Operators and Drivers (up 34.2 per cent or 2,500 job advertisements), Community and Personal Service Workers (up 31.4 per cent or 4,200 job advertisements), Technicians and Trades Workers (up 22.0 per cent or 4,500 job advertisements) and Sales Workers (up 18.7 per cent or 2,100 job advertisements).

• All states and territories recorded an increase in job advertisements in November: NSW (up 4.2 per cent); Victoria (up 24.2 per cent); Queensland (up 4.5 per cent); South Australia (up 1.0 per cent); Western Australia (up 0.3 per cent); Tasmania (up 7.2 per cent); Northern Territory (up 1.8 per cent); ACT (up 3.7 per cent).

• Job advertisements increased in all states and the Northern Territory over the year to November. Tasmania recorded the strongest increase (up 33.3 per cent or 520 job advertisements), followed by Western Australia (up 25.8 per cent or 4,000 job advertisements), South Australia (up 24.4 per cent or 1,700 job advertisements), the Northern Territory (up 21.8 per cent or 330 job advertisements), and Queensland (up 18.4 per cent or 5,200 job advertisements). But recruitment activity in the ACT fell by 0.2 per cent or just 10 job advertisements.

• Over the year to November, in three-month moving average terms, job advertisements increased in 31 of the 37 IVI regions. Dubbo & Western NSW recorded the strongest increase (up 109.9 per cent), followed by NSW North Coast (up 67.6 per cent), South West WA (up 64.4 per cent), Tamworth and North West NSW (up 56.3 per cent) and Riverina & Murray NSW (up 55.3 per cent). But Melbourne recorded the strongest decrease (down 22.8 per cent), followed by Sydney (down 16.1 per cent), Canberra & ACT (down 7.2 per cent), Geelong & Surf Coast VIC (down 7.0 per cent), Outback Queensland (down 3.7 per cent) and Brisbane (down 0.1 per cent).

Industry Employment – November

• In seasonally adjusted terms, employment rose by 248,800 in the three months to November. Jobs rose in 13 of the 19 major industry sectors.

• Over the 12 months to November, 79,200 people have lost jobs. Around 12.9 million Aussies were employed in November, up from 12.6 million in August, but still down from record highs of 13.0 million in February.

• Over the three months to November the number of jobs rose by the most in Professional, Scientific and Technical Services (up 80,200), Administrative and Support Services (up 53,300), Accommodation and Food Services (up 45,800), Transport, Postal and Warehousing (up 35,600) and Retail Trade (up 34,200). But jobs were lost in Wholesale Trade (down 23,100), Health Care and Social Assistance (down 22,700), Agriculture, Forestry and Fishing (down 19,900), Rental, Hiring and Real Estate Services (down 18,900) and Manufacturing (down 16,400).

• Over the year to November, 10 out of 17 sectors shed jobs. The sectors that shed the most jobs over the past year: Accommodation and Food Services (down 93,600), Manufacturing (down 78,000), Other Services (down 33,900). But the strongest gains were in Public Administration and Safety (up 37,900), Professional, Scientific and Technical Services (up 34,600), Retail Trade (up 34,100) and Education and Training (up 27,900).

• Health Care and Social Assistance remains the biggest employer with 1.75 million employees (13.6 per cent of the total), followed by Retail Trade (1.29 million jobs or 10.0 per cent), Professional, Scientific & Technical Services (1.19 million or 9.3 per cent) and Construction (1.18 million or 9.2 per cent).

What is the importance of the economic data?

• Private sector credit figures are released by the Reserve Bank on the last working day of the month. Credit is separated into three categories – housing, other personal and business. Private sector credit is effectively the amount of loans outstanding in the economy. If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive.

• The monthly International Trade in Goods and Services release from the Bureau of Statistics provides estimates on exports and imports of physical goods (such as coal, beef and computers) and services (such as travel receipts). The balance of goods and services (BOGS) is a narrower description of Australia’s external position than the current account estimates. The import data is a useful gauge of consumer and business spending while exports reflect global demand as well as domestic influences such as drought.

• What are the implications of today’s decision? The National Skills Commission 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.

• The Australian Bureau of Statistics (ABS) provides detailed labour market figures one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.

What are the implications for interest rates and investors?

• Business credit growth remains weak, contracting for a seventh successive month in November. Aussie firms continue to protect their balance sheets and pay down debt amid challenging business conditions. Annual business credit growth was the weakest in 8½ years with Australia-China trade tensions, border closures and Sydney’s virus flare up adding to heightened uncertainty.

• That said, Aussie businesses are hiring with job vacancies and advertisements increasing across a slew of leading indicators of job growth, including gauges from the National Skills Commission, ANZ and SEEK. The National Skills Commission recently found that 46.5 per cent of science, technology, engineering and mathematics (STEM) related occupations are considered resilient. Professional, Scientific and Technical Services jobs have been well insulated from the pandemic labour market shock with STEM occupations now sitting at 99.8 per cent of their pre-Covid-19 levels, according to the Commission.

Important Information

The information presented in this email is an extract of a CommSec Economic Insights report. The full report is published on the CommSec website (under Market News > The Markets). The extract and report are approved for distribution in Australia only and must not be directed or distributed to any person or entity outside Australia, except with the prior approval of your Business Unit Compliance team.

The extract has been prepared without taking into account your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any securities or financial instruments, or as a recommendation and/or investment advice. Before acting on the information in this report, you should read the full report and corresponding disclaimers, and consider the appropriateness and suitability of the information, having regard to your own objectives, financial situation and needs and, if necessary, seek appropriate professional of financial advice.

Published by Ryan Felsman, Senior Economist, CommSec