ANZ Senior Economist, Catherine Birch, commented:
Building on June’s 41% rebound, ANZ Job Ads rose a further 17% in July. But the pace of gains slowed, particularly in the second half of the month. The second wave of COVID-19 cases and return to Stage 3 restrictions in Melbourne and the Mitchell Shire have undoubtedly weighed on the recovery in labour demand so far. SEEK has noted a divergence between Victoria and most other states and territories in recent SEEK job ads.
There have been other worrying signs. Payroll jobs turned down in early July and some industries that were less affected earlier in the pandemic, such as construction and professional services, may now be suffering lagged impacts.
And in an ABS survey conducted in mid-July, when asked what they would do when government support measures were no longer available, 10% of businesses reported they would close and 13% would reduce their workforce.
In our forecast update released last week, we had factored in a four-week extension to Stage 3 restrictions and thought the labour market – both in Victoria and elsewhere – would recover more slowly than previously expected.
But the move to Stage 4 restrictions in Melbourne and Stage 3 in regional Victoria announced on Sunday worsens the outlook. We think additional fiscal measures will be needed sooner rather than later to support households, workers and businesses through this very tough period.