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Strongest job gains in Health Care & Education
Employment by industry

Employment by industry: Employment rose by 65,600 in the three months to February. Over the past 12 months, 256,600 people have found jobs (in seasonally adjusted terms). A record 13.02 million Aussies are currently employed.

Job creation: Over the three months to February, most jobs were added in Education & Training (up 50,500), followed by Health Care & Social Assistance (up 21,000), Agriculture, Forestry & Fishing (up 18,200) and Accommodation & Food Services (up 12,500). Over the year, the strongest job gains were in Health Care and Social Assistance (up 101,700), Education & Training (up 97,300), Manufacturing (up 56,000), Construction (up 39,100) and Professional, Scientific and Technical Services (up 38,900).

Largest employers: Health Care and Social Assistance remains the biggest employer with 1.79 million employees (13.8 per cent of the total) followed by Retail Trade (1.26 million jobs or 9.6 per cent), Construction (1.19 million or 9.1 per cent) and Professional, Scientific & Technical Services (1.16 million or 9.0 per cent).

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?

While not market moving – and backward looking – the detailed labour force data provides an interesting breakdown of employment by industry and which sectors of the Aussie economy are adding or shedding jobs.

Over the year to February the economy added 256,600 jobs with an annual growth rate of 2 per cent. Employment growth has been solid with job creation highly concentrated in the Health Care & Social Assistance and Education & Training sectors – accounting for 77 per cent of total job gains.

Unsurprisingly, wage growth in the Health Care & Social Assistance sector is the strongest across all sectors – up 3.1 per cent in the December quarter from a year ago.

But the labour market has deteriorated in March due to shutdowns of several key industries – such as retailing, hospitality, education, recreation and aviation – due to the enforcement of restrictive travel bans, ‘social distancing’ and ‘self-isolation’ measures by governments to try and contain the coronavirus (COVID-19) pandemic.

Workers are already being ‘stood down’ with Flight Centre, Premier Investments, JB HiFi and Hallenstein Glassons (due to New Zealand’s lockdown) all making announcements today that employees with be furloughed immediately. Yesterday, over 36,000 Aussies were told to ‘stand down’ as Virgin Australia and Star Entertainment announced closures.

The Federal government is reportedly poised to establish a national COVID-19 ‘problem-solving’ commission headed by former Fortescue mining executive Mr. Nev Power, as the number of Aussie virus infections increase and jobs are lost.

What do the figures show?

Industry Employment – February

Employment rose by 65,600 in the three months to February. Jobs rose in 9 of the 19 major industry sectors.

Over the past 12 months, 256,600 people have found jobs, up from 247,200 in the 12 months to November. A record 13.02 million Aussies are currently employed.

Over the three months to February the number of jobs rose by the most in Education & Training (up 50,500), followed by Health Care & Social Assistance (up 21,000), Agriculture, Forestry & Fishing (up 18,200) and Accommodation & Food Services (up 12,500).

In the three months to February, the number of jobs fell by the most in Electricity, Gas & Waste Services (down 16,100), followed by Public Administration & Safety (down 15,800), “Other Services” (down 14,200) and Mining (down 10,200).

Over the year to February, 10 out of 19 sectors added jobs. The strongest gains were in Health Care and Social Assistance (up 101,700), Education & Training (up 97,300), Manufacturing (up 56,000), Construction (up 39,100) and Professional, Scientific and Technical Services (up 38,900).

The sectors that shed the most jobs over the past year: “Other Services” (down 36,200), Public Administration & Safety (down 35,000), Retail Trade (down 31,800) and Electricity, Gas & Waste Services (down 17,600).

Health Care and Social Assistance remains the biggest employer with 1.79 million employees (13.8 per cent of the total) followed by Retail Trade (1.26 million jobs or 9.6 per cent), Construction (1.19 million or 9.1 per cent) and Professional, Scientific & Technical Services (1.16 million or 9.0 per cent).

What is the importance of the economic data?

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 is expected to bear the brunt of the coronavirus crisis hit to the labour market. The Retail Trade, Education & Training and Accommodation & Food Services industries employ a combined 3.3 million Aussies. Casual, part-time and contractors have large worker representations within these industries.

With a quarter of all Aussies employed in small businesses with 20 workers or less, business closures and supply disruptions present a huge downside risk to policymakers attempting to navigate a sharp economic downturn and unprecedented health crisis.

All eyes are now focused on key measures of the labour market – unemployment and underemployment – but the number of ‘hours worked’ is probably the most important indicator of them all.

Published by  Ryan Felsman, Senior Economist, CommSec