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A steady return to form

By Michael Emerson

The ailing job market is on the mend, writes Michael Emerson.

Contrary to the views of a number of economic commentators, the November 2012 edition of the My Career Employment Forecast predicts that the job market will grow next year, with 137,000 jobs to be added to the Australian economy by August 2013.

This is an improvement on the year to August 2012, when just 58,000 new positions were added, but it is still below the heady growth rates of about 300,000 jobs being added during the boom years.

The November 2012 edition finds that the number of jobs continues to grow, but growth is very weak by historical standards - though still a lot better than in many European countries. This report also finds that jobs growth is very uneven. On the one hand, the mining sector still remains a standout, with jobs growing at 22.3 per cent annually, whereas in the public sector, manufacturing, retail, tourism and transport, and storage sectors, jobs have all declined.

The report also finds jobs growth has not been even among demographic segments - twilight careers (workers aged 63 or over) remains the fastest-growing segment and numbers have reached record levels. On the other hand, the job market for
Generation Y has slowed, although for better-educated and more-experienced Gen Ys, jobs are growing - managerial positions at 4.4 per cent and professional positions at 3.1 per cent. The job losses are at the unskilled end of the job market, with positions for Gen Y labourers down 6.8 per cent.

The overall market for professionals and managers in Australia has returned to growth after a weak 2011. At the state level, Western Australia continues to be a standout in terms of jobs growth, while South Australia is in the doldrums, NSW is slowly returning to jobs growth, as is Queensland, while the market in Victoria is soft.

This edition also finds that a number of indicators point to a fairly flat job market. Total hours worked have eased, as have vacancy levels, although they are still quite high. Real wages (that is, after allowing for inflation) have continued to grow in Australia, although growth has slowed due to the renewed uncertainty.

Salary levels continue to be different and are growing at different levels across industries and occupations. Full-time workers in the tourism sector have the lowest average pay ($50,500 a year), whereas those in the mining sector earn more than double that, at $119,100 a year. Salaries among professionals are growing at 3.7 per cent, whereas among managers salaries growth is lower, at 3 per cent. Among the unskilled, wages fell 0.3 per cent in the year to June.

Turning to the outlook, the report finds there are more positive signs for the future. In Australia, business and consumer confidence is a little better and interest rates have fallen, which should stimulate the market. Households have been paying off debt and saving since the global financial crisis, to such an extent they will be happy to start spending a little more. The weaker Chinese economic growth has dampened the mining outlook a little, although this sector remains strong.

The forward indicators therefore are pointing to a more positive outlook, with growth picking up through the new year.

Although subdued by historical standards, this will mean the shortage of skilled labour that was so evident before the GFC - and still is in some areas - will increasingly emerge next year. Typically this will be in the higher-skilled roles.

Published: 10 November 2012

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