Friday, April 09, 2010

The Premier State ain't the jobs state

New jobs since September Unemployment rate

Victoria +67,800 5.4%
Queensland +35,800 5.5%
NSW +33,800 5.5%
Western Australia +30,600 5.1%
ACT +6,500 3.5%
South Australia +2,100 5.4%
Tasmania +2,000 5.5%
Northern Territory +700 3.2%

ABS 6202.0, Seasonally adjusted

Australia is creating new jobs at the breathtaking rate of 1000 per day, but fewer than 200 are in NSW.

The latest employment figures show NSW far from pulling its weight, accounting for fewer than 1 in 5 of the new jobs created since September event though NSW makes up almost one third of the Australian population.

By contrast Victoria with a smaller population has created 1 in 3 of the new jobs over the past six months, employing 67,800 new workers at a rate approaching 400 per day. Even the much smaller state of Queensland has piled on more jobs than NSW, adding 35,800 compared to 33,800 in Australia's largest state.

The figures show NSW job creation has become so sluggish it is in danger of being beaten by Western Australia.

The new jobs created in NSW are also of lower quality... Whereas two out of three of Victoria's new jobs have been full-time, in NSW only one out of every two is full time.

The Bureau of Statistics figures show NSW losing 2,600 jobs in March, pushing up its unemployment rate from 5.4 to 5.5 per cent while the national rate remained steady at 5.3.

The 19,600 extra jobs created nationally has some forecasters predicting a national rate of close to 4.75 per cent.

"That's where we are heading, and the problem is that's what normally thought of as full employment," said Dr Nigel Stapledon of the University of New South Wales. "When you approach 5 or 4.75 per cent the Reserve Bank thinks about putting up interest rates, not just to normal levels but further."

"I am thinking about getting out my lecture notes of two years ago and describing what happened the last time the unemployment got that low."

When unemployment slid to 4.2 per cent in March 2008 the Reserve Bank pushed up its cash rate to 7.25 per cent and mortgage rates went beyond 9 per cent.

"The labour market pressures were extreme in the mining sector. They're not going to be anything less this time. If anything they will be worse. There's been some re-regulation of the labour market. The pressures might translate more strongly."

Commsec economist Craig James also predicted an unemployment rate of 4.75 per cent before the end of the year.

"Businesses panicked last year when it became clear that Australia had avoided recession. The desire
was to pick up suitable staff before the job market really started to tighten. Now businesses are largely coasting,
concerned about the implications of stimulus measures being withdrawn."

"Once businesses are confident that a second wave of problems isn't headed our way, we will see a new lift in hiring."

Mr James said one blessing for businesses and for the Reserve Bank was Australia's very high rate of population growth.

"Our working age population is growing at the fastest pace on record, up 2.2 per cent over the past
year. Effectively employment needs to rise by around 25,000 each month to prevent the jobless rate from

"By itself this jobs news is not strong enough to frighten the horses. After going gangbusters from September to January this year, employment gains have proved more modest and the jobless rate is now going sideways."

BT Group economist Chirs Caton said the news should reassure the Reserve Bank that it was "on the correct path" when it pushed up rates on Tuesday.

"That said, if it wants it has earned the right to skip in May and raise rates again in June if it wants," he added.

Published in today's SMH and Age

Related Posts

. Looking for a job - don't look in Victoria, even though it's piling them on

. Welcome back... to the biggest "return to work" in 20 years

. Where we work now - it's not where you think