Pete Wargent blogspot

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

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Thursday, 21 January 2016

Unemployment trending down

Employment trends

Greater Sydney's oustanding and well-documented jobs boom continues apace with another +92,800 positions added in the year to December 2015 according to today's Detailed Labour Force release. 

Greater Melbourne also looks to be in good nick, having added +51,900 new jobs.

Happily after years of zero growth, regional New South Wales has suddenly come to the jobs party as the positive sentiment ripples outwards from Sydney, at last adding +77,800 new positions over the year, with decent employment gains in the Hunter Valley, Shoalhaven, the Illawarra, and to a lesser extent Newcastle.

Unemployment rates in the coal mining regions of New South Wales appear to be falling, after earlier spikes. 

On the other hand, employment in regional Victoria has declined, with impressive annual gains in Geelong (+8,300) and Shepparton (+4,900) more than offset by declines in Bendigo (-7,300), Ballarat, Latrobe-Gippsland, and elsewhere. 

After a tough few years of transition as the mining boom peaked, Brisbane is now adding jobs at a healthy pace, with total employment increasing by +34,400 over the past year.

While I don't want to jinx it after half a decade of jobs growth close to zero, but the red line over the past four months suggests that things might even be turning a corner for the labour market in Adelaide!

The Australian reported today that there may yet be a lifeline on offer to save Holden's Elizabeth plant from its expected 2017 closure, which would potentially be wonderful news for the region.

That said, 'thousands of jobs might not go' isn't exactly a compelling case to invest in property there just yet - personally I prefer to aim for big open goals or 'one foot hurdles' in imperfect property markets rather than bets on such uncertain outcomes.

Totting up the cumulative employment growth in one chart shows that Sydney, Melbourne and Brisbane have between them added +323,200 jobs over the past two years, which is well over two thirds of the total employment growth for the 24 month period. 

Unemployment declines

At the capital city level the raw original data reported shows that unemployment rates are trending down in Greater Sydney, Melbourne and Brisbane, as measured on a 12mMA basis.

On the other hand, the trend remains up for now in Greater Adelaide and Perth, while the outlook in Greater Hobart seems to have dimmed a little, with job creation stalling and total employment declining a little in 2015.

Looking at the monthly data, Greater Sydney's unemployment rate of just 4.6 per cent reflects a strong economy.

Meanwhile Greater Brisbane's unemployment rate of 5.2 per cent is another solid improvement on the 5.5 per cent seen one year ago and well down from 5.8 per cent in December 2013.