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Staffing Trends – What does 2015 hold for Australia’s job market?

Staffing_Trends_-_Kevan_SangsterWith the Christmas period almost upon us, the thoughts of the business world are already turning to the New Year and how Australia’s economy will fare in 2015. One key factor in determining this will be the labour market, which has been under pressure in recent months, with unemployment reaching a post GFC high of 6.3% in November.

In this article we look at the prospects for Australia’s job market in the coming year within TMS Consulting’s five core market sectors, namely Government, Health, Not for Profit, Resources and Infrastructure

Government Sector

Despite the recent press attention on the Federal budget cuts, the Government is still a significant part of the Australian job market. The headline cuts to the Foreign Aid budget will have some negative effects to employment in this sector, but with State Elections scheduled for both New South Wales and Queensland, and a new Labour Government in Victoria, it is likely that the State Government sector will offset any reductions at Federal level.

Predicted Outcome: Neutral 

Health Sector 

Again, the headlines have all been about the Medicare co-payment in this sector, but this is unlikely to have a significant effect on employment prospects on the Health sector as a whole (even if it passes parliament). With the growth in the private Health sector continuing, it is likely that any reduction in Health spending at a State or Federal level will be offset, as the model moves to a more ‘user pays’ approach in some non-critical care sectors.

Predicted Outcome: Neutral     

Not for Profit Sector

In times of economic austerity, it is traditionally the voluntary and not for profit sector that suffers the most, and our prediction is that 2015 will follow this pattern in Australia. The significant cuts to the Foreign Aid budget also has a knock-on effect of reducing the funding for Australian Institutions set up to manage this, so it is likely that employment will be negatively affected, although a much bigger issue for this sector will be a potential reduction in donations from the public as people ‘tighten their belts’ economically.

Predicted Outcome: Negative

Resources Sector

Having been the primary driver of economic and job growth in Australia for the past decade, the Resources sector is now straining under inflated wage costs and a significant reduction in the price of the raw materials they are selling. As such, many new projects are on hold due to not being economically viable at current commodity prices, and the majority of existing projects are moving from construction to production phase, which traditionally employs fewer people. With no sign of commodity prices rising in the near term, it is highly likely that employment in this sector will continue to fall.

Predicted Outcome: Negative 

Infrastructure Sector

In an attempt to kick-start the economy in the post-resources boom, the Federal Government has openly targeted the infrastructure sector as a way of stimulating employment growth, and this is likely to continue in 2015. With a number of large, high profile projects slated over the coming years across Australia, we see an increase in the demand for skilled resources in this sector, although at salary levels much reduced from the resources boom of the mid 2000’s.

Predicted Outcome: Positive

Overall, it seems that the labour market in Australia is likely to have a tough year in 2015, with a few isolated bright spots. As financial commentator Philp Baker recently pointed out in the Financial Review (16/12/14), “to get the unemployment rate to fall, the nation needs a growth rate of at least 3.5%, well above the 2.5% it is forecast to grow at”. With economic growth scheduled to be below 3% for the foreseeable future as Australia grapples with low commodity prices and relatively high government debt, it is therefore our conclusion that unemployment is likely to rise in the coming year. However, this may be tempered later in the year, as the fall in the Australian dollar filters through to domestic spending patterns, which is likely to be positive for local retailers.

For a more specific insight into the employment market in your sector or state, feel free to contact our Strategic Sourcing division on 07 3003 1473. Our Sourcing team specialise in providing Project Resourcing within the IT and Engineering disciplines across these market sectors, and would be happy to advise you of trends in these fields.