Recent confusion over the apparently conflicting signals of increasing unemployment, but lower numbers of Newstart welfare recipients was resolved here at MacroBusiness. Simply put, the two measures differ due to time lags, variations in the population sample (you need less than $3000 to qualify for Newstart), time lags and seasonal patterns.
The current softening of the Australian labour market appears to comprise a ‘white-collar’ jobs recession in addition to the expected ‘blue-collar’ redundancies as a result of low growth environment and the huge scaling back of residential construction.
While I have much anecdotal evidence of this trend occurring through my network of professional acquaintances, here is a quick snapshot of recent media coverage that seems to further support these observations.
First, the NSW government is under pressure and looking to downsize their workforce by about 5000 people in the near future. While is appears the intention is to achieve this ‘public service cull’ via voluntary redundancies, it seems they won’t be voluntary at all – “You’ve got three months to be voluntarily redundant. If not we’ll make you redundant.” Most of the jobs are in education, finance, transport, family services and health.
Second, professional services firm KPMG has recently seen a significant slowdown in some parts of the business and is looking to take measure to provide the firm ‘greater flexibility”. They “…will offer thousands of staff alternative employment options including voluntary redundancies and part paid leave, similar to the benefits offered at the height of the global financial crisis.” Smaller firms appear to be seeing the same decline in business and I expect professional services firms reliant on property development will be feeling the pinch.
Third, with the downturn in business and housing lending, banks are feeling the pinch in the operations and staff lay-offs are on the cards. While “no bank is issuing press releases with the headline ”You’re fired!” but, behind the scenes, the realisation has set in that the banking game’s major growth engine isn’t coming back any time soon.”
Bizarrely, ABC television is offering redundancies to hundreds of staff.
The list goes on, but the evidence is clear that outside of mining sector investment, the Australian economy has not recovered to pre-GFC growth trends. The labour market is soft, and importantly, it is in a transition towards mining infrastructure construction and services.
I would be interested to hear whether readers’ experiences support, or contradict, this observation.
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