The ABS this week released its latest Detailed Labour Force figures for the month of December 2014.
One of the key themes of this blog in recent years has been that we see many regional (and for different reasons manufacturing) economies - and thus most of their related property markets - struggling as the mining construction boom which has kept those economies inflated for the past decade at long last recedes.
In short, Australia still has a new two-speed economy but one which is now working in reverse, with mining regions set to suffer and some capital city areas to thrive while benefiting from necessarily low interest rates.
That kind of works OK as a macro level theory, but what does the data say?
However, the subsequent detailed labour force figures generally receive far less media attention. By which, of course, I mean that they receive barely any coverage at all. So, then, let's take a look at what we can learn in five short parts!
Part 1 - Employment growth is capital city focussed
Regional New South Wales, however, continued to shed positions on a net basis with total employment for the 'Rest of State' regions remaining significantly lower than was the case way back in Q4 2010, a tremendously weak performance given the huge boom in the state's population (currently tracking at more than 109,000 heads per annum).
This is partly related to the state's beleaguered coal sector and partly to a wider shift towards capital city employment and population growth.
Although coal prices have recently seen a moderate 7 percent bounce and a now-lower Australian dollar will help a little, there has been an outlandish collapse in spot prices over the past 6 months and the inevitable result has been job losses and closures in a number of coal mining regions and locations.
As the below chart shows, regional Victoria has also struggled on the job creation front since 2011, though not quite to the same extent as regional New South Wales, and there was a neat +28k result for the past month here.
Labour market challenges are not restricted to regional Australia, however. Greater Adelaide, for example, has failed to add any jobs on a net basis over the past four years, these particularly being tough times for economies which lean heavily on manufacturing.
Our chart packs which consider only full time jobs growth have shown an even more pronounced trend as much of the regional workforce is casualised.
Elizabeth in Adelaide has by a huge margin the highest reported capital city unemployment rate in the country at more than 33 percent and rising sharply. It's a poor dynamic and economic outlook for many parts of South Australia.
Part 2 - Unemployment rates rising in regional Australia
Greater Brisbane also came in at a promising 5.5 percent, representing another month of improvement for the Queensland capital.
We expect that this trend will continue. As we move into the less labour-intensive production phase of the mining boom, folk are flocking back towards the capital cities in search of employment.
Part 3 - Sydney and regional New South Wales diverge
Currency and futures market action suggests that further interest rate cuts are likely to follow, despite the Reserve's preference for rate stability - and if this plays out, realistically it will light a fire under Sydney's already hot housing market.
This will inevitably result in further migration flows towards the largest employment centres as is already being evidenced in the demographic statistics.
Part 4 - Brisbane and Queensland
Some of Greater Brisbane's inner suburban regions have low levels of unemployment, and since the market has only been in its up-cycle for a shorter period if time, some opportunities clearly existing for informed investors in this market.
However, investors in Brisbane need to be on the ball for which areas and property types to avoid as the new supply is poorly matched to demand (i.e. the dwelling types that the market actually wants).
Further, as covered here recently a number other regional Queensland property markets have been struggling - including Emerald, Gladstone, Bowen, Moranbah, Rockhaampton, Mackay and others, with coal also playing a role in some of these locations.
Part 5 - Unemployment risks in the regions
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