Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Friday, 2 October 2015

Job vacancies follow house prices

Job vacancies improve

Positive news ahoy as private sector Job Vacancies increased by +8.8 per cent over the year to August, suggesting reasonable employment gains ahead.

Total private and public sector vacancies were up by +8.5 per cent over the year to 160,200.

NSW economy leads the nation

Vacancies have followed rising house prices and dwelling construction in Sydney just as they did from 2002 as the property market ripped through its preceding boom. 

Indeed, the correlation of job vacancies with housing markets is reasonably interesting. 

New South Wales (58,100) comfortably has the highest number of vacancies followed by Victoria (38,900) and Queensland (26,800).

Services industries

Job vacancies are largely concentrated in the services industries, while on the other hand the mining, construction and manufacturing sectors appear to be weak.

The year-on-year change in job vacancies by industry tells a similar story with thousands of vacancies in services and tech industries, but mining, construction and manufacturing vacancies decling.

The wrap

In terms of what this means for local economies, the outlook appears to be concerning for a number of regions as the resources construction boom finally collapses in upon itself.

It was reported this week that house prices have been hit hard in Gladstone, Mackay, and to a lesser extent Townsville, as well as mining services towns around the Bowen Basin.

It is not yet known whether BlueScope Steel will close Port Kembla on the New South Wales south coast, although the company has flagged an intention to target $200 million of savings- this could result in another 5,000 jobs being cut, thereby crippling the Illawarra economy in the process.

A closure of the port would wipe an estimated $3.3 billion from the local economy thrutsing it headlong into recession, resulting in a far bigger hit than the last round of layoffs in 2011 (the mining boom was still tearing along then to pick up some of the slack - but there will be no such luck in 2016).

Meanwhile South Australia's employment shock appears set to accelerate, with Arrium announcing yesterday that it will aim to cut a further $100 million of costs in order to improve the viability of the Whyalla steelworks.

It has been a tough time indeed for the "Iron Triangle", while the Holden closure still hangs the like proverbial sword of Damocles over the Adelaide economy.

Overall employment data over the past year has pointed towards rising regional unemployment and a dearth of employment growth. 

The largest capital cities are generally faring well by comparison.