Online job advertisements in Australia are at their highest level since 2008 but economists caution the end of the JobKeeper wage subsidy could push up unemployment by mid-year despite a rapid economic recovery from the coronavirus pandemic. The National Skills Commission’s March 2021 Internet Vacancy Index found jobs advertised online reached a 12-year high of 238,700 over the month. The index, which measures new advertisements on SEEK, CareerOne and Australian JobSearch, is now 96.4 per cent above the March 2020 level when the first round of COVID-19 restrictions kicked in.
Since the height of lockdowns, there have been 11 consecutive monthly improvements in advertised roles, with all states now showing growth. Commonwealth Bank head of Australian economics Gareth Aird said the indicators were positive and unemployment was likely to drop quickly this year. CBA expects the jobless rate to be 5 per cent by the end of 2021 and 4.7 per cent by 2022. This is a 0.5 per cent improvement in CBA’s forecast for the labour force over this year.
Australia’s unemployment rate was 5.8 per cent in February. The March result, due on Thursday, is widely expected by economists to continue showing an improvement. The jobs market is also expected to benefit from the upcoming Census, with 38,000 temporary roles being created nationally to help deliver the 2021 survey. This includes 20,000 field officers currently being recruited by the ABS. “The Australian economic recovery from the COVID-19 recession has been a lot stronger and a lot faster than the official forecasting family of the Commonwealth Treasury and the RBA expected. In truth it has been a lot stronger than most forecasters anticipated,” Mr Aird said. He said the strength of job vacancies data and hiring intentions suggested the end of JobKeeper “will not be particularly problematic for the labour market as a whole”. “We acknowledge, however, that the risks of COVID-related distributions to economic activity have risen,” he said, noting delays in the vaccine rollout.
IFM Investors chief economist Alex Joiner says the end of the $90 billion wage subsidy program on March 28 could result in a material increase in the unemployment rate over the next few months. Due to the timing of the Australian Bureau of Statistics’ labour force survey, the full impact is unlikely to be clear until June.
About 1.1 million employees were receiving the subsidy during the first quarter of the year and Treasury estimated 100,000 to 150,000 would lose their job when JobKeeper ended. With this in mind, Mr Joiner estimates the April unemployment rate could push up above 6 per cent and reach about 6.4 per cent in May before starting to drop back. “There may be some unemployment more readily absorbed as we are seeing high levels of jobs vacancies,” Mr Joiner said. “I can’t say it’s one-for-one that you’ll come off JobKeeper and get one of those jobs as for many there will be a skills mismatch.”
Calculating the possible impact of the end of the subsidy on jobs data was difficult, he said, noting some who lost work might choose not to search for a new role. This would affect the participation rate but not the unemployment rate. Another factor creating jobs market uncertainty was international border closures. With fewer incoming workers, there could be job opportunities for residents that might otherwise have been absorbed by new migrants, he said.
Regardless, he said there would still be pressure on the government to spend and support industries facing a precarious future in the federal budget. “The government has done well to manage the crisis but it’s pulling back support,” Mr Joiner said. “There needs to be more support for disrupted sectors, the tourism and education sectors and where it will be best targeted.”
