Thursday, April 10, 2008

Full-employment no longer

The only region that had it, has lost it.

Full-employment has deserted the Australian Capital Territory.

Figures released by the Bureau of Statistics yesterday show that the number of unemployed Canberra residents climbed back up above the number of vacant jobs in March for the first time since last May.

An extra 598 Canberra residents joined the unemployment queue in March taking Canberra's unemployment total to 6,767 – the highest since the start of 2007.

By contrast the number of Canberra job vacancies has shrunk to 5,374 – the lowest since the start of 2007...

The chief executive of the ACT Chamber of Commerce Chris Peters said that Canberra businesses were putting off hiring workers.

“They are in a holding pattern, at least until after the May Budget,” he said.

“In the lead-up to every election business confidence and the ACT economy goes flat, no matter how certain or uncertain the result is going to be.

“Usually after the election everything bounces back very quickly. But that didn't happen after November's election.”

“My view is that because the Commonwealth has such a significant impact on the ACT businesses in Canberra are waiting to see what's in the Budget. They are putting on hold decisions about capital and people.”

“We saw investment in building starting to slow in the June quarter last year and short-term leasing of equipment started to slow in the September quarter, again in the lead-up to the election.

“For now, it's a holding pattern.”

The ACT's unemployment rate jumped to 3.5 per cent in March - its highest level since January 2007. In trend terms the rate edged up from 2.6 per cent to 2.7 per cent, and remains the lowest in Australia.

The nationwide unemployment rate jumped from below 4 per cent to 4.1 per cent in March as an extra 13,800 Australians joined the unemployment queue despite the creation of 14,800 new jobs.

The Employment Minister Julia Gillard said the employment numbers were “still very, very strong” but she said that the latest interest rate increase has obviously hurt Australians.

“We know that the environment for many working families is very, very tight indeed,” she said.

New South Wales was the surprise winner from the employment figures, gaining close to an extra 35,000 workers in March. Victoria lost around 20,000.

Westpac senior economist Anthony Thompson said that the national employment market was likely to remain strong even while the broader economy turned down.

“Firms are hoarding labour after finding it so difficult to attract and retain staff for so long amidst an historically tight market,” he said.

He expected the unemployment rate to remain close to 4 per cent right through until the end of the year.

ANZ economist Riki Polygenis agreed, saying that for the moment firms were reluctant to lay off quality staff for fear they may not be able to replace them when economic conditions improved.

In the meantime the number of advertised new vacancies was falling.

Enterprise bargaining data released by the Department of Employment and Workplace Relations yesterday showed wage growth broadly steady, with private sector wages up 3.8 per cent and public sector wages up 4.3 per cent in existing agreements and private sector wages up 3.8 per cent and public sector wages up 4.2 per cent in new agreements.