Manufacturing jobs plummet to record low

By Leith van Onselen

The Australian Bureau of Statistics (ABS) yesterday released its quarterly labour force report, which breaks-down employment at the industry level to May 2019.

Below are some key charts, which present the changes in employment aggregates on a trend basis.

First, the quarterly change in employment by industry:

Next, the annual employment change:

And finally, here are the job changes since the Global Financial Crisis (GFC):

As you can see, the manufacturing industry is the big loser, with manufacturing jobs falling by 33,300 over the quarter, by 101,400 over the year, and by 194,500 since the GFC.

The below time series chart shows that the number of manufacturing jobs fell to an all-time low 848,700 in May, as well as to a record low 6.6% share of the labour market:

If I had to guess the cause of the manufacturing jobs bust, I’d put it down to the slump in dwelling construction, which is likely driving fewer inputs into the construction process (e.g. bricks, plasterboard, kitchens, etc).

As shown above, overall construction jobs also fell over the year; albeit the fall in housing-related construction jobs is likely being offset by higher infrastructure construction jobs.

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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