Job advertisements show strong regional divergence in December

Highlights

• The number of job advertisements on the internet and in newspapers fell 0.9% in December compared to the previous month. Total job advertisements were 2.6% lower than in December 2010, the first negative annual growth rate since February 2010.

• The fall in total job advertisements was driven by a 1.1% fall in internet job advertising in the month. Internet job advertisements were 2.3% lower than a year ago. In contrast, newspaper job ads were 3.5% higher in December, the second consecutive monthly rise, but remained 9.3% lower than a year ago.

• The notable rise in newspaper job advertisements in December was driven largely by an exceptionally strong rise in job advertising in the Northern Territory. Excluding the Northern Territory, newspaper job advertisements rose 0.8% in December, to be 12.3% lower than a year ago.

• In trend terms, total job ads fell by 0.8% m/m in December and are now 3.4% lower than a year-earlier. Trend growth in job advertising has now been negative since April 2011. However, December does show some divergence in trend growth between internet and newspaper job advertising. While internet job advertising fell by 0.8% in trend terms in December, newspaper job advertising rose 0.1% in the month, the first monthly rise in this series since February 2010. 

ANZ Head of Australian Economics Katie Dean said: 

• The total number of job advertisements fell in December in seasonally adjusted terms. This however, reflected quite divergent patterns between internet and newspaper job advertising, with internet job advertising falling while newspaper job advertising rose sharply. This, the second consecutive monthly rise in newspaper job advertising, needs to be watched closely, as newspaper job advertising often leads developments in overall job advertising (and therefore employment growth).

• However, as the Christmas period shows the highest level of seasonal volatility in job advertising, we, as usual, do treat these seasonally adjusted December results with some caution. We will need to await the January and possibly February data before we can confirm these emerging developments. As usual, we therefore focus on the trend data in today’s release for implications for the labour market. 

• The modest fall of 0.8% in the trend measure of total job advertisements in December points to at best modest employment gains for the Australian economy over coming months. Indeed, the current trend rate of employment growth is unlikely to be fast enough to absorb the forecast growth in the labour force in the short term. As a result, ANZ forecasts the unemployment rate to rise to 5½% by mid-2012. The unemployment rate is then expected to stay at this elevated level for most of 2012, before falling modestly in 2013 as broader economic activity continues to pick up in 2 ANZ RESEARCH response to strong mining and infrastructure investment and a likely extended period of relatively low domestic interest rates. 

• Nevertheless, the sharp rise in the seasonally adjusted measure of newspaper job advertising in December does highlight that while total (internet plus newspaper) job advertising may be soft, there are some very notable ‘bright spots’. These, as expected, are concentrated in the resource-rich States and Territories. The geographical divergence in Australia’s labour market appears to be widening.

• The 3.5% rise in newspaper job advertising in December was driven by exceptionally strong double-digit growth in the Northern Territory, as well as double-digit growth in Western Australia and another strong positive rise in Queensland. While the large number of mining projects are no doubt a strong driver of job advertising in these regions, we would also point to ongoing flood-reconstruction as likely supporting job advertising in Queensland. The unusually high level of job advertising in the Northern Territory in December meanwhile also appears to have been driven by a sharp rise in advertising by the government sector in this location.

• In contrast, job advertising continues to weaken in Australia’s two most populous States, New South Wales and Victoria. This most likely reflects ongoing consolidation in the manufacturing and retail sectors, as well as some pull-back in advertising for professional services, which can be very sensitive to changes in business confidence, including increased concerns related to adverse developments in global financial conditions. 

• Job advertising also remains weak in the other ‘non-mining’ States and Territories, contracting in Tasmania and the Australian Capital Territory. The fall in job advertising in South Australia in December meanwhile suggests that strong resource-related activity in this region is so far not enough to offset weakness in other parts of this economy. 

• The ABS publishes December labour force data on Thursday. ANZ expects seasonally adjusted employment to fall by 2,000 and the unemployment rate to rise to 5.4%. Lower than usual seasonal hiring, particularly in the retail and hospitality sectors, is expected to more than offset continued strong labour demand in mining and infrastructure related projects. 

• ANZ’s forecast for a further modest rise in the unemployment rate, together with continued heightened global risks, should keep domestic inflationary pressures relatively benign for now. This will provide the RBA with further scope to provide another modest easing of monetary policy. ANZ continues to forecast another 25bps cut in the RBA cash rate, to 4.00%, in February.

TOTAL JOB ADVERTISEMENTS

The ANZ Job Advertisements Series shows the total number of jobs advertised in major metropolitan newspapers and on the internet fell 0.9% m/m in December to an average of 179,970 advertisements per week (seasonally adjusted). Job advertising is now 2.6% lower than a year earlier. This is the first annual decline since February 2010. 

In trend terms, total job advertisements declined by 0.8% m/m in December, recording their ninth consecutive monthly decline.

NEWSPAPER JOB ADVERTISEMENTS 

The number of job advertisements in major metropolitan newspapers rose 3.5% in December, the second consecutive monthly rise in newspaper job advertising. Newspaper job advertisements do, however, remain 9.3% lower than a year ago, in part reflecting the continuing shift towards internet advertising.

In trend terms, the number of newspaper job advertisements rose by 0.1% m/m in December, the first monthly rise since February 2010. The trend number of newspaper job advertisements do, however, remain 14.0% lower than this time last year. 

In December, newspaper job advertisements continued to rise in the mining regions of Queensland (+3.8% m/m), Western Australia (+10.3% m/m) and the Northern Territory (+64.7% m/m). Job advertisements fell in the more populous states of New South Wales (- 4.7% m/m) and Victoria (-0.9% m/m) as well as in South Australia (-2.9% m/m), Tasmania (- 4.5% m/m) and the ACT (-0.8% m/m). This suggests a return to the more geographical twospeed economy that was prevalent in the first phase of the commodities boom.

INTERNET JOB ADVERTISEMENTS

The number of internet job advertisements was 1.1% lower in the month of December, to be 2.3% lower than year ago levels. This is the first negative annual growth rate in internet job advertisements since February 2010 (see Table 4). Internet job advertising is now 7.5% lower than the recent peak in March 2011. 

In trend terms, internet job advertisements fell 0.8% m/m, the ninth consecutive monthly decline. Annual trend growth is now negative at -2.8% y/y.

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