Record fall in job vacancies; SEEK job ads up in June

Most jobs shed in Accommodation & Food Services
Job vacancies; Employment by industry

¾ ABS job vacancies: In seasonally adjusted terms, job vacancies fell by a record 43.2 per cent in the three months to May or by 98,200 available positions to 14½-year lows of 129,100, according to the Bureau of Statistics (ABS). Vacancies are down 43.4 per cent over the year.

¾ SEEK job vacancies: SEEK job ad volumes lifted by 21.9 per cent in the fortnight ended June 21 and now are at 68.3 per cent of pre-virus levels in February 2020.

¾ Employment by industry: In seasonally adjusted terms, employment fell by 811,200 in the three months to May. Jobs fell in 13 of the 19 major industry sectors, falling most in Accommodation and Food Services (down 293,100); Education and Training (down 89,300); Arts and Recreation Services (down 87,800); and Manufacturing (down 68,300). But jobs in Electricity, Gas, Water and Waste Services (up 32,000); Agriculture, Forestry and Fishing (up 30,000); Public Administration and Safety (up 26,600) and Financial and Insurance Services (up 20,400) all rose.

¾ Largest employers: Health Care and Social Assistance remains the biggest employer with 1.73 million employees (14.2 per cent of the total) followed by Retail Trade (1.19 million jobs or 9.8 per cent), Construction (1.17 million or 9.6 per cent) and Professional, Scientific & Technical Services (1.11 million or 9.1 per cent).

The job vacancies data is a leading indicator of the job market and therefore important for consumer-focussed stocks and companies. 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 coronavirus health crisis and the resulting economic lockdown have hit Aussie workers hard. More than 1.6 million Australians are currently claiming JobSeeker benefits. The downturn has taken a huge toll on younger Aussies and females, in particular.

· So where have the job losses occurred and which industries have been hit hardest? Over the three months to May most jobs have been shed in Accommodation and Food Services (down 293,100); Education and Training (down 89,300); Arts and Recreation Services (down 87,800); and Manufacturing (down 68,300).

· Job vacancies – according to the Bureau of Statistics – plunged by a record 43.2 per cent in the three months to May. The number of positions available (129,100) were at the lowest level since November 2004. By industry, job vacancies in Construction; Accommodation & Food Services; Transport, Postal & Warehousing; Rental, Hiring and Real Estate Services; Professional, Scientific and Technical Services; Arts and Recreation Services; and Other Services were all at record lows in May (data available back to November 2009).

· But it’s not all bad news with fortunes varying across industries. In fact, over the three months to May, jobs in Electricity, Gas, Water and Waste Services (up 32,000); Agriculture, Forestry and Fishing (up 30,000); Public Administration and Safety (up 26,600) and Financial and Insurance Services (up 20,400) all rose.

 

What do the figures show?

Job vacancies – May

· In seasonally adjusted terms, job vacancies fell by a record 43.2 per cent in the three months to May to 14½-year lows of 129,100 available positions. Vacancies are down 43.4 per cent over the year.

· In original terms, over the three months to May changes in vacancies across states and territories were: NSW (down 49.8 per cent); Victoria (down 51.9 per cent); Queensland (down 34.4 per cent); South Australia (down 41.9 per cent); Western Australia (down 39.1 per cent); Tasmania (down 44.1 per cent); Northern Territory (down 41.4 per cent) and ACT (down 45.5 per cent).

· Vacancies fell by 105,000 or 45.8 per cent in original terms in the three months to May. In terms of industries, all 18 industries recorded lower vacancies. Vacancies fell the most in Administrative & Support Services (down 13,700), followed by Professional, Scientific and Technical Services (down 13,200); Health Care and Social Assistance (down 10,100); Accommodation and Food Services (down 9,700); Construction (down 8,300) and Retail Trade (down 7,500). But Electricity, Gas, Water and Waste Services vacancies were down by just 500.

· In original terms, annual changes in vacancies across states and territories were: NSW (down 48.4 per cent); Victoria (down 52.2 per cent); Queensland (down 24.1 per cent); South Australia (down 39.3 per cent); Western Australia (down 27.6 per cent); Tasmania (down 42.4 per cent); Northern Territory (down 59.5 per cent) and ACT (down 46.3 per cent).

· In the year to May, vacancies fell by 94,600 or 43.2 per cent in original terms. All 18 industries recorded lower vacancies. Vacancies fell the most in Professional, Scientific and Technical Services (down 15,500), followed by Administrative and Support Services (down 13,200); Health Care and Social Assistance (down 10,100); Accommodation and Food Services (down 9,000); Retail Trade (down 7,600); Construction (down 7,400); Manufacturing (down 4,500). Electricity, Gas, Water and Waste Services vacancies fell by just 400 and Information Media and Telecommunications vacancies were down 500 positions.

· Job vacancies were at record lows in Construction; Accommodation & Food Services; Transport, Postal & Warehousing; Rental, Hiring and Real Estate Services; Professional, Scientific and Technical Services; Arts and Recreation Services; and Other Services (data back to November 2009).

· By sector, private sector job vacancies fell by 45 per cent over the three months to May to be down by 46 per cent over the year. And vacancies in the public sector fell by 28.9 per cent to be down 43.4 per cent from a year ago. There were 111,200 private sector and 17,900 public sector vacancies in May.

Industry Employment – May

· In seasonally adjusted terms, employment fell by 811,200 in the three months to May. Jobs fell in 13 of the 19 major industry sectors.

· Over the 12 months to May, 691,400 people have lost jobs. A record 12.2 million Aussies are currently employed – the lowest level since February 2017 – down from record highs of 13 million in February.

· Over the three months to May the number of jobs rose by the most in Electricity, Gas, Water and Waste Services (up 32,000); Agriculture, Forestry and Fishing (up 30,000); Public Administration and Safety (up 26,600) and Financial and Insurance Services (up 20,400).

· In the three months to May, the number of jobs fell by the most in Accommodation and Food Services (down 293,100); Education and Training (down 89,300); Arts and Recreation Services (down 87,800); Manufacturing (down 68,300); Transport, Postal and Warehousing (down 63,800); and Health Care and Social Assistance (down 59,900).

· Over the year to May, 13 out of 19 sectors shed jobs. The sectors that shed the most jobs over the past year: Accommodation and Food Services (down 268,800), followed by Retail Trade (down 110,300); Arts and Recreation Services (down 98,100); Transport, Postal and Warehousing (down 81,000); and Other Services (down 80,200).

· The strongest gains were in Health Care and Social Assistance (up 52,100); Financial and Insurance Services (up 49,600); Agriculture, Forestry and Fishing (up 25,400); and Public Administration and Safety (up 14,100).

· Health Care and Social Assistance remains the biggest employer with 1.73 million employees (14.2 per cent of the total), followed by Retail Trade (1.19 million jobs or 9.8 per cent), Construction (1.17 million or 9.6 per cent) and Professional, Scientific & Technical Services (1.11 million or 9.1 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 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?

· Australia’s services sector has borne the brunt of the coronavirus crisis due to government social distancing restrictions. However, the latest Commonwealth Bank survey of purchasing managers in the services sector has shown an improvement in activity levels in the past month.

· While the economic disruption from the virus saw businesses shutdown or hibernate in late March and April, more timely leading indicators of the job market have picked up as the economy has gradually reopened. In fact, SEEK job ads have lifted in June, up by almost 22 per cent in past fortnight. Job ads are now just 32 per cent below pre-virus levels. Ads for Healthcare & Medical Services are 90.7 per cent of pre-virus levels; Trades & Services (85.4 per cent); and Manufacturing, Transport & Logistics (82.5 per cent).

· But concerns are now increasing that the re-emergence of virus clusters in Victoria will hamper efforts to re-open the economy. Given the scale of job losses in the hard-hit Accommodation and Food Services; Education and Training; Arts and Recreation Services; and Manufacturing industries it appears that the Government will need to continue to provide much needed financial support beyond the end of September – when the JobKeeper wage subsidy is due to conclude.

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