Turf QLD Industry Alert |AiG AUSTRALIAN ECONOMIC UPDATE 13 March 2015

AiG AUSTRALIAN ECONOMIC UPDATE 13 March 2015

AUSTRALIAN ECONOMIC DEVELOPMENTS – LABOUR FORCE

In the latest labour force data released this week, the unemployment rate stayed near its 13-year high of 6.3% in February (trend data), while the labour force ‘underutilisation’ rate (unemployment plus under-employment) reached 15.1% of the labour force, the highest such rate since August 1997. Employment growth remains weak, at only 1.3% p.a. and is still mainly driven by part-time job creation. Job vacancies continue to improve, which may see employment demand strengthen in 2015, but vacancy numbers may still prove insufficient to reduce the unemployment rate. Business confidence fell further amid these ongoing weak conditions. Consumer sentiment also dipped, after a sharp lift in February.

Unemployment rate remains at a 13-year high of 6.3% in February

This week the ABS released the latest monthly labour force estimates for February. Due to ongoing measurement problems, the ABS recommends looking to the trend numbers, rather than the seasonally adjusted ones, as a guide to current labour force movements. Therefore, the data below are all in trend terms.

The total number of people employed in Australia increased by 14,000 in February to be up by 1.3% p.a. (to a total of 11.65 million people). This followed an increase of 16,100 in employment in January (revised, trend data). Monthly jobs growth has improved over the past six months, averaging 15,000 per month (or +0.13% m/m), up from an average of just 4,000 (or +0.03% m/m) between June and August 2014.  Most of this modest growth in employment however, was in part-time jobs (35 hours per week or less).

Part-time employment rose by 7,300 in February (+0.2% m/m; +1.8% p.a., revised trend), the eighth consecutive monthly increase. This was mainly driven by an increase in the number of female part-time employees (up 5,500 people or +0.2% m/m; +2.2% p.a.). Male part-time employees increased by 1,800 people (+0.2% m/m, +0.7% p.a.) in February. Part-time employment continued to increase as a share of the workforce, reaching a new record high of 30.8% in February. In total, of the net 363,000 jobs that have been added to the Australian economy over the three years to February 2015, 69% (249,400 jobs) have been part-time.

Full-time employment increased by 6,700 in February (+0.1% m/m; +1.1% p.a.). Male full-time employment grew by 4,100 (+0.1 % m/m; +1.3% p.a.) while female full-time employment increased by 2,700 (+0.1% m/m; +0.8% p.a.) in February. Reflecting the growing prevalence of part-time work, total hours worked across the economy increased at a slower pace than the headcount employment numbers, to be up by just 0.2% m/m and +0.7% p.a. (trend). Total hours worked in the Australian economy has increased on a monthly basis over the past four months, after declining between August and October 2014.