After a number of months topping the unemployment statistics nationally, Queensland’s employment market has started 2013 with modest growth, with figures released by the state’s Office of State Revenue last week showing Queensland’s unemployment rate dropped to 5.9% in January from a revised 6.0% the previous month.
Although still above the national average (currently 5.4%), this is positive news for a state economy still recovering from significant public sector job cuts early in the financial year. In this article, TMS examines whether this development is the start of a trend, and whether Queenslanders can look forward to improved job prospects in the coming months.
There is little doubt that in recent months the employment market in Queensland has been significantly affected by the debt burden of the state government, and it subsequent attempts to reduce this by cutting back on public spending partly in the form of job cuts across most non-front line state government services. This has had an impact not just on nominal employment levels in the Queensland public service, but also businesses that provide goods and services to this sector, with many looking freezing growth plans until the situation improves, or in some cases reducing their own staffing levels in response to reduced demand. So does this drop in unemployment in Queensland mean that things are returning to normal in the state’s job market?
Anecdotal evidence from our clients in the state government sector suggests that a number of projects that have been mothballed in recent months now seem to be back on the agenda, although spending decisions are being carefully considered and an emphasis on productivity gains rather than additional headcount is still the prevailing mantra for most.
In addition, a slight rise in commodity prices in recent months has renewed confidence in the resources sector, with investment decisions (including hiring plans) being re-evaluated in a positive light. This is particularly significant in Queensland, where the job market is still heavily dependent on coal and gas projects, although this has yet to filter through to the local job market in any significant way.
Finally, lower interest rates on mortgage payments and improved economic sentiment overseas are positive for the mood of local consumers, although it appears from retailers that this increased optimism is not yet filtering through to increased sales in the domestic market. As such the job market in the retail sector continues to be sluggish, with no significant increase likely in the short term.
As a result, it is our conclusion that the outlook for the Queensland job market is cautiously optimistic, although significant increases in job vacancies are unlikely in the short term as the above factors work their way through the economy. Our recent observations from the early part of 2013 point to a slow improving employment outlook for Queensland, with the majority of job growth coming in second half of the calendar year.
