Regional unemployment: Winners & Losers
Regional jobless rates: Of the 15 SA4 regions with the highest unemployment rates in the land, Queensland had the highest representation with six regions in March followed by NSW (four) and Victoria (three). Sydney – South West had the highest unemployment rate of 11.2 per cent, but the NSW Riverina region had the lowest jobless rate at just 0.8 per cent.
Employment: More regions reported annual job gains in March than those reporting job losses. Overall 46 of 87 regions reported gains, led by Melbourne – West (up 41,700). But the NSW Capital region lost the most jobs (-19,800) over the year to March.
Regional job data highlights the regions of strength and weakness and can influence housing and spending activity.
What does it all mean and what do the figures show?
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• Aussie regions with the highest and lowest jobless rates were scattered across the nation in March rather than being confined to a particular state or territory. Of the 15 regions with the highest unemployment rates in the land, Queensland had the highest representation with six regions followed by NSW (four) and Victoria (three).
• Of the 15 regions with the lowest unemployment rates, NSW had the highest representation with seven regions in March followed by Queensland (three) and Victoria (two).
• Jobless rates can bounce around from month to month, but unemployment remains high in pockets of Western Sydney. In fact, unemployment in Sydney – South West was the highest in the country at 11.2 per cent in March – the region’s second highest reading since January 2001. Over 14,000 jobs were lost in the region over the year to March. The unemployment rate in Blacktown – also in Sydney’s West – eased from a 5½-year high of 9.8 per cent in February to 9.1 per cent in March, but remains elevated. And Ipswich and Logan – Beaudesert – both in Queensland – still have high unemployment rates of near 10 per cent.
• Regional Australia has been a pandemic outperformer. In fact, 12 of the 15 SA4 regions with the lowest unemployment were outside the major capital cities. The region with the lowest jobless rate in March was the Riverina, NSW at just 0.8 per cent, followed by the Central West, NSW at just 1.5 per cent. Encouragingly, Queensland regions also feature prominently with unemployment rates in Central Queensland and Toowoomba between 1.8 per cent and 1.9 per cent with mining and agriculture both performing well in the pandemic.
• Despite the challenges posed by the coronavirus, 46 of 87 regions posted job gains over the year to March. Melbourne – West led the way with 41,700 jobs added, but the job creating regions were spread across the nation. The Gold Coast added 25,200 positions over the year, followed by Perth – South West WA (+22,200) and Illawarra, NSW (+16,900).
• Which regions lost most jobs? The NSW Capital region – which stretches from Young and Goulburn to Cooma and Eden – shed 19,800 over the year to March. The region is still recovering from severe bushfires prior to the pandemic. And Victoria’s Mornington Peninsula lost 18,200 positions over the period, perhaps impacted by reduced visitation by Melburnians due to multiple virus lockdowns.
What is the importance of the economic data?
• The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel. Detailed demographic and regional information is provided a week after top level estimates.
What are the implications for investors?
• Australia’s labour market recovery has been astonishing, but uneven across regions and industries. Parts of the country still have high unemployment with the closure of international borders (excluding New Zealand), mini-lockdowns and the impact of natural disasters weighing on job creation a year on from the national lockdown.
• That said, a record number of Aussies were employed in March with the key measure of labour demand – hours worked – back above pre-pandemic levels. Job vacancies are the highest in over 12 years, pointing to additional job gains. But with workforce participation at record highs and government stimulus fading – with the expiry of JobKeeper – the pace of employment gains and absorption of spare capacity could ease near-term.
• Commonwealth Bank (CBA) Group economists, however, still expect the unemployment rate to fall from 5.6 per cent in March to 5.0 per cent by December amid solid labour demand and skills shortages in strongly performing sectors of the economy.
Published by Ryan Felsman, Senior Economist, CommSec