Australian manufacturing jobs crash to all-time low

The Australian Bureau of Statistics (ABS) yesterday released its quarterly labour force report, which breaks-down employment at the industry level to August 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 14,200 over the quarter, by 77,200 over the year, and by 171,400 since the GFC.

The below time series chart shows that the number of manufacturing jobs fell to an all-time low 871,700 in August, as well as to a record low 6.7% share of the labour market:

If I had to guess the cause of the manufacturing decline over the past year, 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):

That said, overall construction jobs actually risen over the year to August, with the fall in housing-related construction jobs likely being offset by higher infrastructure construction jobs:

The outlook for construction jobs is poor, however, with dwelling approvals crashing:

At the same time as the infrastructure pipeline is shrinking:

Expect significant construction job losses over the next 18 months.

Unconventional Economist

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

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