Small Area Labour Market data confirms the weaker NQ picture; Townsville losing work force

The release by the Dept of Employment of their Small Area Labour Market (SALM) data for the first quarter to March 2016 confirms the weaker story that we’ve been seeing in North Queensland for a while.

The SALM data is based on a range of indicators including ABS Labour Force data for the SA4 areas, Youth and Newstart allowance data and the 2011 Census data at the SA2 level. As such this series cannot be directly compared with the ABS unemployment rates at the SA4 area level (or the Conus Trend series which is derived from that data). The data is presented on a smoothed basis where the series is smoothed over a four quarter basis to remove regional volatility.

What we see for the first quarter is the unemployment rate in the Cassowary Coast Regional Council area at 8.1% (up from 8.0% in Q4). The total labour force has increased by about 100 while jobs are up just over 60 over the quarter. Looking into the area in more depth by way of the SA2 areas we see Innisfail with unemployment at 12.1% (up from 11.6%), Johnstone at 6.4% (unchanged) and Tully also 6.4% (up from 6.2%).

The Cairns Regional Council area saw the labour force increase by just over 600 with about 400 new jobs over the quarter and an unemployment rate at 7.4% (up from 7.2%).

Townsville City Council has had a shocker of a quarter (which is no surprise to see) with the unemployment rate jumping to 7.9% (from 7.5%); labour force fell by 2,300 while 2,500 jobs were lost. The fact that the number registered as unemployed has risen by only 200 in the face of such a sharp drop in employment suggests a large number of people have removed themselves from the labour force; either simply by not registering as unemployed or by leaving the area. However, such a phenomenon is yet be suggested in the Conus Trend Participation Rate data for the Townsville SA4 region, where Trend PR has fallen only moderately.

(all data on a smoothed 4 quarters basis)

As mentioned above, the method used to calculate these SALM numbers, and the fact that the LGA areas do not correspond to the SA4 regions, precludes making direct comparison with the SA4 Conus Trend series. However, it is perhaps worth noting that since March the Conus Trend data shows the Townsville SA4 region having lost another 1,500 jobs with the unemployment rate moving rapidly higher to 10.5% in April (from 10.0% in March). This does not suggest that the SALM data for the second quarter (due for release in Sept) will be any rosier for the Townsville LGA.

The SA4 Conus Trend series also shows a deteriorating picture for Cairns since March with 400 Trend job losses and the Trend unemployment rate rising to 9.3%.

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4 replies
  1. Glen
    Glen says:

    Interesting numbers Pete, the situation in Townsville is well documented and some of the evidence from on the ground here is thousands have taken some sizeable payouts after 20,30 and in some cases 40 years of employment from a variety of employees including mining, govt and the like of Aurizon and effectively pulled up stumps, some permanently, some for an indefinite period until the money runs out, this may go some way to explain to drop in participation rate that would seem at odds with normal swings.
    The numbers I find interesting are the Cairns results and what seems a complete disconnect between other good numbers for the region that have not flowed through to employment or construction activity. I spent a few days up there last week with our distributors and agents of the industrial and construction sides of our business and they all advise it’s as bad as ever and their sales reflect that. Meetings with the council and consultants did not fill me with any confidence that things are going to improve in the short term unfortunately.

    Reply
    • Pete Faulkner
      Pete Faulkner says:

      Thanks for those comments Glen. You’re certainly right that the positive news with regard to some data, in particular tourism, in Cairns doesn’t appear to be flowing through to the jobs market. Some suggestion that we are seeing employers putting part-time workers on more hours rather than taking on new workers. That would certainly explain the slow labour market numbers but if that trend continues then at some point (hopefully in the near future) we should finally see some translation into employment.
      Interesting to hear you observations on the ground in Townsville. Cheers Pete

      Reply
      • Mark Beath
        Mark Beath says:

        It may well be that the tourism sector has been able to absorb the tourism growth within the exiting labour force. Unfortunately we don’t get details such as hours worked or part/full time at regional level. So far it doesn’t look like any recovery has yet generated a capacity response at least in accommodation and that may still be slow to respond dependent on occupancy rates. I suspect the same applies to such as tour operators and not particularly aware of any notable expansion to existing services?

        The growing Chinese sector also tends to be counter seasonal for TNQ. A quick flick back through the airport data to 2004 does seem to support that the seasonal amplitude between the March and September quarters has compressed between the pre and post GFC periods.

        Also the mining construction downturn may have a bigger impact on Cairns than thought. It was heavily promoted as a FIFO centre post GFC.

        Reply
        • Pete Faulkner
          Pete Faulkner says:

          Good points Mark. As you say, part of the reason might become clear if we had a fall-time, part-time data split for the regional numbers. There has been some (small) capacity and service increases that I’m aware of in my neck of the woods but I agree that there doesn’t seem to have been much in Cairns. Perhaps the aquarium is the start of that? I guess that uncertainty surrounding Aquis might have stayed the hand of some hoteliers; I perhaps wouldn’t have been looking to expand room numbers in Cairns if there was a possible $8 bn multi-hotel development going up just down the road.
          Thanks for the comment.

          Reply

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