Job advertisements took an unusual slump in December falling by 2.3%, according to the latest figures from the Advantage Job Index, with the retail and tourism sectors the worst hit.
But while Advantage Resourcing director of global market intelligence Bob Olivier says the decline is “of concern”, he also notes it is the first fall in several months and ads are still up 22% from the previous year.
“This is the first month of declines in awhile, since July, so we have to ask ourselves, is this just a glitch or based on something more profound? And to be honest, you can’t judge the market on one month.”
“It’s also particularly risky to judge this market in December, because the market usually falls off around now. It won’t be until February that we get a true feeling about whether this is a one-off or it’s something more significant.”
The seasonally adjusted figures reveal a lower decline, but the individual sectors show weakness: retail was the worst hit with a drop of 10%, followed by tourism and hospitality, which both recorded declines of 10.77%. All states recorded declines, except for Western Australia which recorded an increase of 1.19%.
Olivier says the “clear reason” for the decline is the November rate rise.
“We saw in November the effect the rate rise had on the market, and then the banks exacerbated that increase. We saw that affect all sectors, and retail has particularly been hit quite hard.”
Olivier says the figures show how badly the retail sector is hurting, following on from a particularly weak Christmas when companies engaged in an ongoing discounting war. He points out the recent effort from retailers to combat GST laws is symptomatic of the larger issue at hand.
“There will be winners and losers in this type of environment. And while engineering is doing well, hospitality, tourism and retail are all doing so badly because the exchange rate is up near parity.”
He also confirms the job market is strong, but that it may take awhile longer to reach unemployment of 4.75% as the Government predicts, due to the latest slowdown.
“There are still plenty of jobs. You’ll just have a lot more competition. Once the interest rate rise has worked its way through, then when things settle down, you’ll see the sentiment improve.”
I think this nervousness is still apparent though because of that rate rise. However, once it’s been worked into people’s calculations, we will return to a more stable market.”
But the news isn’t good for everyone. Olivier says Queensland will suffer this year, having already been under the pump due to reliance on the hospitality and tourism sectors.
“As the waters recede from the worst floods in living memory, jobs will dry up in hospitality, mining and agriculture,” he says.
“Nor is Queensland likely to remain a stand out performer in the two speed economy as the floods have also brought the mining sector to its knees. While December and January are always less predictable for the job market, the fall in job advertisements in December is much greater than those recorded in previous years and doesn’t augur well for New Year job seekers.”
Olivier says that it a weakening job market, “coupled with significant job losses”, will set a negative tone for Queensland in the next few months.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
