- The latest payroll figures show Australia’s labour market is mounting a fragile recovery.
- While hours worked continues to lift, the number of jobs grew just 0.1% over the fortnight to mid-March.
- Construction and agriculture slipped backwards, while the arts and recreation, and accommodation and food services sectors remain well behind where they were.
- Commonwealth Bank senior economist Belinda Allen said the data shows Australia is “several years” from returning to a pre-COVID-19 labour market.
Any remaining hope Australia could be headed for a quick, V-shaped recovery may have been shredded by the latest payroll figures.
Released on Tuesday, the ABS figures show that while the country’s labour force is rebounding, it has hit some hurdles, as employment figures gained just 0.1% over the last fortnight.
“The pace of recovery has clearly slowed, though, which may be a sign that a quick recovery in the labour market as lockdowns ease is not necessarily on the cards, and further highlights the importance of supplementary wage support via the JobKeeper and JobSeeker programs,” Royal Bank of Canada strategist Robert Thompson wrote in a note issued to Business Insider Australia.
“We still expect the next few labour force surveys to show some rebound in jobs, and mathematically this remains on the cards, but we’re currently looking at a very fragile recovery.”
The figures show payrolls are still 6.4% lower than where they were prior to the mid-March shutdown, as many hundreds of thousands of workers remain out of work.
Thompson noted this fragility would only be exacerbated leading up to 23 July, when Treasury is due to hand down its decision on whether the JobKeeper wage subsidy will be axed, rejigged or extended.
Tuesday’s figures show how the economic recovery has progressed unevenly between occupations, as some sectors continue to slide backwards while others gallop forward.
Take mining and information media, which rebounded strongly over the fortnight to mid-June with hours appearing to lift by more than 6% and jobs by more than 4%.
Construction, along with agriculture, forestry and fishing, have dragged, ending the fortnight in a worse position than where they started.
Zoom out though and the picture becomes clearer still, with some workers left further behind still.
“Sectors such as accommodation and food services, and arts and recreation have been hit hard by COVID-19, with payrolls down 28.6% and 23.9%, respectively, compared with March 14,” Indeed Asia-Pacific economist Callam Pickering said.
“No other industry group has experienced a fall of 10% or more. A rebound in payrolls across those two sectors has already begun and we’d expect that to continue throughout June and July.”
Others like financial services have managed to muddle through the shutdown relatively unscathed, while Western Australia has seen a far stronger resurgence than other states in recent weeks. Meanwhile certain demographics remain disproportionately affected.
“Women have generally been harder hit by COVID-19 than men. Payrolls have fallen by more for women than men in almost every age group,” Pickering said.
“One-in-six women aged under 20 and one-in-ten women aged 20-29 have lost their jobs over the past three months. That compares with one-in-seven men under 20 and one-in-eleven men aged 20-29.”
While the Commonwealth Bank acknowledged the frequent data can prove volatile, the country’s largest retail bank lamented Tuesday’s result was “disappointing”, with hours worked likely lifting faster than jobs.
“We expect that it will take several years for the economy and labour market to return to where it was pre-COVID-19,” CBA senior economist Belinda Allen said.
“It is likely that we will need to see some carefully thought out structural reform in the economy if we want to see our living standards rise in the coming years.”