Good News on the Australia employment front?

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    The RBA offers a bleak outlook for jobs

    • by:Garry Shilson-Josling, AAP Economist
    • From: AAP
    • February 07, 201411:16AM

    IF you are a jobseeker needing a bit of cheering up, or a wage-earner in need of a raise, it might be best to avoid reading the Reserve Bank of Australia's latest monetary policy statement.

    The RBA's quarterly Statement on Monetary policy, released on Friday, said there were various factors weighing on demand for workers recently.


    Slow growth in production of goods and services is one - the less you produce, the fewer workers you need.


    And this sluggish growth has been especially evident in sectors of the economy typically using a higher proportion of labour in their businesses.


    The RBA also says there has been a continued focus by firms on reducing costs and improving productivity.


    There's also a climate of uncertainty leading to a general reluctance to take on new staff.


    The RBA says this uncertainty is consistent with weakness in plans for investment in new productive capacity in the non-mining sector that the RBA hopes will drive the so-called "rebalancing" of the economy away from resources.


    Meanwhile, the fading of the resources investment boom is tipping the balance in the jobs market in the wrong direction.


    "Much of the weakness in employment has been accounted for by business services which, in part, reflects the effects of the shift from the investment to the production phase of the resources boom," the RBA said.


    As a result of all these influences, the jobless rate has been drifting up for the past couple of years.


    At last measure, in December, it was at 5.8 per cent, and within a whisker of being rounded up to 5.9.


    But it's going higher.


    "These factors are likely to continue to weigh on employment growth in the near term, and the unemployment rate is expected to remain on an upward trend for several quarters," the RBA said in the statement.


    "With growth in economic activity expected to remain below trend for a few more quarters at least, it is likely that employment growth will be only moderate over the coming year and the unemployment rate will continue to edge higher."


    But, all going well, the RBA said that from early 2015, stronger economic growth should generate more jobs, causing employment growth to pick up and for the unemployment rate to decline gradually.


    The rising rate of unemployment or, as the RBA calls it, the "increase in spare capacity in the labour market", has brought wages growth by various measures down to "historically low levels".


    Wages growth will pick up from around mid-2015 as the economy gathers pace, the RBA said.


    "However, it will take some time for spare capacity in the labour market to be absorbed and so wage growth is expected to remain below its decade average."

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    In my opinion the Adelaide job market has been struggling for the past 18 months. The jobs that were in demand and easy to fill 18 months ago are still in demand and easy to fill today and the jobs where they were receiving high volumes of applications are now receiving even higher volumes of applications.


    If you are a migrant looking for work, there is still work available but it can depend on many factors such as what job/skill you have, what you are willing to do, what money you are willing to earn, whether you have contacts in Adelaide, your location, your application, applying for the right jobs and understanding the jobs where you will stand a chance of gaining, being in the right place at the right time, luck and the right attitude and approach to name a few!


    In my opinion if you come to Adelaide and say 'I am only prepared to do this job and at this salary' you are limiting your options and it may take you longer to find work. For some people that is not an issue if you have plenty of money in the bank and are happy to sit it out and wait then that is your choice.


    Of course with the closure of Holden this will mean more workers competing for jobs in Adelaide. My advice to people is if they are planning on coming over, get here sooner rather than later and get yourself established in work before the closure.

    Edited by Jessica Berry

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