Thursday, December 13, 2007

The nation's capital "flatlining"

Employment growth has flatlined in the ACT with the latest official figures showing that the number of Canberra residents in work has actually fallen over the last year while increasing in every other state.

The national employment figures released yesterday show that a net 52,600 Australians gained in jobs in November, none of them in the ACT.

The Acting Prime Minister and Employment Minister Julia Gillard welcomed the national news saying that workforce participation and employment had hit a record high, reflecting the underlying strength of Australia's economy...

Over the year to November an extra 298,800 Australians found jobs, with substantial increases in employment in every state and territory other than the ACT.

While an extra 8,100 Tasmanians found jobs, an extra 7,100 Northern Territorians, an extra 15,900 South Australians, an extra 33,500 West Australians an extra 74,700 Queenslanders, an extra 92,200 Victorians and an extra 68,200 residents of NSW, amongst ACT residents employment fell by 895.

The results lend weight to claim made by Access Economics this week that the ACT economy had “hit the wall” with its spending growth “stalled”.

Access forecast that spending growth in the ACT would fall from 4.0 per cent this financial year to 2.5 per cent in the next one and 0.1 per cent in financial year after - by far the lowest growth rate in the nation.

An Access director David Rumbens blamed the ACT's accommodation shortage which he said had throttled employment growth. “Quite literally the ACT has hit a supply side wall,” he said.

The most up-to-date measure of the ACT's economic health contained in national accounts released last week suggests that that ACT economy stopped growing between the June and September quarters.

In seasonally adjusted terms the Territory's state final demand contracted 1.9 per cent between the two quarters. In trend terms after rounding the growth rate was 0.0 per cent.

In every other state and territory the growth rate was clearly positive.

Economists contacted by the Canberra Times yesterday were at a loss to explain the apparent contraction.

Westpac senior economist Anthony Thompson said he was “puzzled” by the slide in employment. The ANZ's specialist in Australian economics Riki Polygenis said it was “quite surprising”.

Amanda Tan from the St George Bank that the result might reflect the small sample size of the Bureau of Statistics employment survey in the ACT.

The chief economist at HSBC Capital Markets John Edwards said it was possible that people leaving the public service were not being replaced because the Territory's tight housing market and good employment conditions elsewhere made it hard to attract people to the ACT.

The ACT is the only state or territory in which there are more jobs vacant than unemployed people available to fill them. Yesterday's figures suggest that there were 5,374 unemployed ACT residents in November. The latest job vacancy figures (for August) suggest there were 6,100 jobs going unfilled.

The ACT's unemployment rate of 2.8 per cent is by far the lowest in the nation. In November every other state of territory had an unemployment rate of 3 per cent or greater. The national rate climbed from 4.4 to 4.5 per cent.