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Australian job outlook positive despite softening in key sectors

March 14, 2018 Careers No Comments Email Email

High demand for labour across the Wholesale & Retail Trade and Finance, Insurance & Real Estate sectors has kept Australia’s employment Outlook at one of the strongest levels in over 6 years.

When compared to the same period last year, the Outlook remains upbeat despite notable declines in hiring expectations in crucial sectors such as Mining & Construction and Manufacturing. 

These are the results from the ManpowerGroup Employment Outlook Survey for the second quarter of 2018, which records a Net Employment Outlook (NEO) of of +10% for Australia, signaling that more employers plan to increase staffing levels than not heading into the second quarter of this year. The survey collects data from over 59,000 employers in 44 countries, including 1,500 in Australia. 

Australia Net Employment Outlook

The strong national result is unchanged when compared to the same period last year, but declines by three percentage points quarter-on-quarter. An increase in staffing levels is anticipated across all industry sectors and seven of eight regions during Q2 2018. Despite the overall positive NEO in Australia, hiring expectations are below average for the Asia Pacific region where the strongest Outlooks are reported in Taiwan (+26%), Japan (+24%) and India (+22%).

Asia Pacific Net Employment Outlooks

The latest data paints a picture of significant differences in hiring expectations across the country, both on a sector-by-sector basis and when compared regionally. Expectations in the Wholesale & Retail Trade sector have increased by seven percentage points compared to the same period last year, while employers in the Finance, Insurance & Real Estate sector report an increase of four percentage points. 

However, these improved Outlooks have been offset by a softening in hiring expectations across a number of other key sectors. Employers in the Mining & Construction sector report a decline of four percentage points year-on-year, as have those in the Manufacturing sector. Similarly, employers in the Services sector report a decline of three percentage points compared to the same period in 2017. Despite the easing in the employment Outlook across these key sectors, all remain in positive territory.

Australia Employment Outlook by Industry

The impact of a softer Outlook in the Mining & Construction sector can be seen in Queensland where hiring expectations are down three percentage points year-on-year as the state deals with an end to the frenetic pace of apartment building in Brisbane over recent years. Yet in Western Australia, where mining and construction are integral parts of the state’s economy, the employment Outlook has increased by two percentage points as the state begins to emerge from a housing downturn over the last 18 months.

Australia Employment Outlook by State

ManpowerGroup Australia & New Zealand Managing Director Richard Fischer believes the national NEO of +10% is clear evidence of a strong labour market while noting that there are distinct differences across the country.

“The employment Outlook in Australia remains at one of the strongest levels in six years”, said Mr Fischer. “However, we continue to see variation across sectors and regions. Most notable is the easing employment Outlook for the Mining & Construction sector and the Manufacturing sector, while hiring intentions have picked up in the formerly subdued Wholesale & Retail Trade sector.”

“The improved employment Outlook in the Wholesale & Retail Trade sector is encouraging and suggests that businesses are confident consumer demand will hold up in 2018 as wages pressure builds in the economy,” Added Mr. Fischer.

Large and medium-size organisations have recorded both year-on-year gains of one and five percentage points, respectively. However, uncertain hiring plans are reported by small and micro-size businesses with employment Outlooks of -1% and -5%. The softer Outlook by small organisations may reflect concern around increasing headcount at a time when there is a growing debate about the need to increase wages across the economy.

Mr. Fischer also said that despite softening in key sectors the Outlook overall is strong and continues to be positive for hopes of wage increases in the coming quarters.

“The strength of the employment Outlook across the country continues to bode well for gains in household income over the coming year. While this may take some time to flow through the economy, there are clearly positive signs.”

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