Deloitte Access Economics has released its Quarterly Employment Forecasts Report, which paints the picture of a job market propped up by record government spending.
Deloitte notes that almost 390,000 Australians found jobs in the past year, with around two-thirds being full-time, “highlighting the labour market’s resilience”.
However, “the overall strength of the labour market has masked the relative strength of non-market sector employment compared to the market sector”, Deloitte notes. “In the year to the December quarter of 2024, the non-market sector (health care, education, public administration) accounted for approximately 80% of total employment gains”.
As a result, “Australia’s labour market challenges are far more about the productivity of labour than creating the jobs themselves”, argues Deloitte.
“Since its peak in March 2022, Australia’s labour productivity has fallen by 5.7% and labour productivity in the non-market sector now sits at a near 20-year low”.
Deloitte also forecasts that non-market job growth will remain strong, whereas the market (private) sector will continue to struggle:
“The slowdown in employment growth is being felt the hardest in the market sector of the economy as businesses are cautious about increasing headcount while economic activity is still fragile”.
“Overall, market sector employment is expected to grow by 1.2% (113,700 workers) in 2024-25 and a further 0.8% (84,400 workers) in 2025-26”.
“On the other hand, the entire non-market sector (health care, education, and public admin) is set to grow in the year ahead. Total non-market sector employment is set to grow by 4.9% (210,900 workers) in 2024-25 and a further 3.0% (143,400 workers) in 2025-26”.
Reflecting the growth in non-market jobs, the human services workforce is expected to grow by 4.1% (212,400 workers) in 2024-25 and a further 2.7% (146,000 workers) in 2025-26, well above the total workforce average.
In short, Australia is facing a prolonged boom in low-productivity, non-market jobs mostly funded by the taxpayer.
