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Friday, 22 June 2018

Sydney unemployment rate falls to 4.2pc

Manufacturing picks up

Construction employment declined a bit over the three months to May 2018.

As detailed in our free sample report for fund managers and investors, the looming and potentially sharp downturn in construction jobs from century-highs as a share of total employment is a key risk in Australia. 

However, there was an offsetting strong increase in manufacturing and public sector employment in the quarter. 

Manufacturing employment being on the rise again might be something of a surprise given auto industry closures, but manufacturing is quite a broad term, incorporating food manufacture for overseas consumers, for example. 

And this dynamic has helped to keep the annual average number of unemployed persons declining, albeit glacially, down to 723,900 from 768,400 at the September 2015 peak. 

Sydney's unemployment rate declined again to just 4.2 per cent in May, taking the annual average unemployment rate for the harbour city down to 4.49 per cent - that's the lowest rate since 2008, and hardly the dynamics typically associated with a protracted housing market downturn. 

At the other end of the spectrum Hobart's unemployment rate leapt to 7.3 per cent in May.

Hopefully that's an anomalous blip, rather than a surfeit of interstate migrants heading to Tassie without a job (it rarely pays to read too much into a solitary month of original figures)!

Volume measures show tightening

One final point of interest here is that although it is often reported (and how!) that the underutilisation rate in the labour force has been elevated for some time in Australia, when you look at the amount of extra work sought by Aussies, the volume measure has been gradually declining over the past three years. 

This is arguably at least as important than the headline rate of how many heads want more work, because although there are people in the serious position of wanting a full time job but only able to find part time work, equally there are also many part-timers that wouldn't mind finding a few extra hours. 

This more instructive (but almost never reported) measure of underutilisation has declined across each of the past three years from 7.88 per cent in May 2015, to 7.35 per cent in May 2018, in original terms.

It's a glacial improvement, then - but it's an improvement nonetheless!