Queensland notches up another positive jobs report

The ABS release of Labour Force data for July shows the Trend unemployment rate in Queensland stable at 6.3% having added 8,300 employed for the month (+27,000 seasonally adjusted) after June was also revised slightly higher. This is now the 9th straight month of Trend increases and pushes total employment gains over the past year to 64,000; of those increases just under a third have been full-time. The more volatile seasonally adjusted data shows the unemployment rate having fallen from 6.5% in June to 6.2% in July.

While Queensland has improved, the pace of that improvement still fails to match that seen at a National level. The nation added 27,900 (seasonally adjusted) or 26,000 (Trend) employed in July and saw the unemployment rate stable at 5.6% on both measures. Despite full-time positions falling in July over the course of the year the country has added 239,300 new employed with 197,700 (or 83%) of those full-time.

Regional labour force data will be released next week at which time we will be updating the Conus Trend Regional Jobs data series.

No sign of improvement in Far North Building Approvals

This morning we saw the release of the ABS original regional building approvals data for June. As always, we need to consider this volatile series in light of the Conus Trend to make much sense of it.

In the SA4 regions of Cairns and Townsville there was little to get excited about. The Conus Trend for residential approvals in Cairns in June rose slightly to 81, but only after May was revised down from 86 to 80. In Townsville the Conus Trend remained stable at 79, although May was revised down from 86.

As we noted last week (see here), the tide for approvals appears to have turned somewhat in Queensland in recent months but analysis of the Conus Trend data shows us that the improvement is all coming in Greater Brisbane with the Rest of Queensland stable at best. In the past 6 months Trend approvals in Greater Brisbane are up 28% to 2,055 while in the Rest of Queensland they have fallen 4% to 1,486.

Within the Greater Brisbane area hot-spots in the past 6 months have been Brisbane-West (+82%), Brisbane-Inner City (+118%), Moreton Bay-North (+34%) and Moreton Bay-South (+45%).

Looking at the Local Government Areas in the Far North we see the Cairns Regional Council (incl Douglas Shire) area Trend at 57 (unchanged from an upwardly revised May); Cassowary Coast Regional Council Trend stable at 5 (after May was revised down from 6); Tablelands Regional Council (incl Mareeba Shire) Trend unchanged at 18. To our south Townsville City Council Trend came in at 69 (down from 71 in May which was itself revised down from 75).

The full set of Conus Trend data for the SA4 areas in QLD is available for download below. Please feel free to use this data (for non-commercial purposes) but we appreciate you acknowledging Conus when you do so.

Conus Trend Building Approvals QLD – June 2017

 

Exports lead as QLD economy grows 3.9% y/y, 2.5% ann

Today saw the release by the Queensland Treasury of their estimates for Gross State Product for the first quarter of 2017. The ABS produce state Final Demand data on a quarterly basis (although this ignores net exports) but Gross State Product numbers only annually at the end of each financial year, so these quarterly estimates from Treasury are our only indication of how the total economy (incl net exports) is tracking. There is always some discussion about whether we can trust the Treasury quarterly data but we have always seen these as an excellent set of data; on the occasions when its data seems to diverge from ABS estimates we often see subsequent revisions bringing the two series back into line (see chart below for comparison).

On today’s data Gross State Expenditure (the “domestic” side of the economy) rose 0.3% q/q (after Q4 was revised down to +0.3% from +0.4%). This brings GSE on an annual basis to an increase of 1.3% (Q4 revised down slightly to +0.6%) which is the State’s best result since Q2 2013. The ABS have QLD’s State Final Demand at +1.0% ann (after +0.3% in Q4), which is the best result since Q1 2014. Private Sector Investment is still down 4.0% ann but this is the slowest pace of contraction since Q3 2014. As the chart below demonstrates, business investment has finally stabilised after the sharp fall following the mining investment boom. However, Household Expenditure (which is the single largest component) rose just 2.4% ann which is the slowest pace of growth since Q2 2015 and reflects weak wages growth.

When we add in net exports we arrive at a Gross State Product figure for Q1 which is up 1.2% q/q (after Q4 was revised up to +1.1% q/q), up 2.5% ann (up from +2.1% ann in Q4) and up 3.9% y/y. This compares very favorably with the national GDP data which shows a 1.6% y/y, or 1.1% ann, increase.

Although annual Gross State Product has grown by $7.9 bn since Q1 2016 the huge turnaround in Net Exports (which have gone from a $900 million deficit a year ago to a $4.9 bn surplus now) is the main reason for the growth.

However one spins these numbers they look like good news. The domestic side of the economy, while hardly roaring, is ticking along slightly faster than the nation as a whole and booming exports has the State growing at almost 2 1/2 times faster than the country as a whole. There will be some concern that the impacts of Cyclone Debbie and a higher A$ will drag the Q2 figures weaker but (barring further significant moves in the Aussie or a collapse in resource prices…neither of which we think likely) any such result is likely to be short-lived and have little impact on annual growth rates. The challenge for the State Government, as the Courier Mail points out today, will be to convert this solid growth into jobs and, ultimately, rising incomes.

Pete spoke to radio 4CA this morning about the data, and tourism into TNQ. You can listen below.

The changing face of QLD employment over the decades

In a previous post (see here) we called on the ABS to take a look at providing better regional labour force data, if only at a Greater Brisbane and Rest of Queensland level. The following brief analysis of our own Conus Trend data shows what a difference such data can make to our understanding of the employment story in our State.

We have taken a look at the split between Trend full-time and part-time employment in Greater Brisbane and the Rest of Queensland since Jan 1999. What this shows us is that, despite large growth in total number employed (up 791,900), how those jobs have been shared around the State has resulted in large changes to the face of employment. Greater Brisbane has added 425,900 of those jobs with the Rest of Queensland trailing behind with just 366,000.

When we consider the full-time/part-time split of these new jobs an even clearer picture emerges. Greater Brisbane has added 260,700 full-time jobs while the Rest of Queensland has seen just 225,600 more (with 33,400 of those added in just the past few months). The make-up of the Queensland labour market has shifted significantly over the years, as the two charts below make clear.

Back in 1999 35.5% of all the State’s jobs were full-time and based in Greater Brisbane. The Rest of Queensland was home to full-time jobs that made up 38% of the State’s total employment. By July 2017 Greater Brisbane could now boast full-time jobs that accounted for 34.5% of the QLD total while in the Rest of Queensland the measure has fallen to 34.3%. Part-time jobs obviously increased in line with these declines.

When we consider the employment in each Area on its own we see that full-time work in Greater Brisbane has fallen from a high of 74% at the end of 1999 to a recent (May 2017) low of just 69%. In the Rest of Queensland the declines was even more dramatic; down from 74% in May 1999 to just 67.5% at the end of 2016. In recent months we have seen some recovery in both Areas, with the Rest of Queensland leading the growth although only recovering to remain well below the current level in Greater Brisbane.

Over the past two decades there has been a significant shift towards more part-time work. This shift has been more pronounced in the Rest of Queensland than in the capital city, although recent improvements have gone some way to re-balancing that.

Cost of Living Indexes show employees doing best

Today’s Cost of Living Indexes for the second quarter show that it continues to be those in employment who are being impacted by “cost of living pressures” the least; perhaps just as well given the slow pace of wages growth although worth noting that wages growth in the first quarter was running at 1.9%, which is still above the rate of cost of living increases.

The COL Indexes are designed to answer the question “By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?” They consider this question for a variety of household types (given the different expenditure patterns of households).

We see cost of living increases for all household types virtually unchanged from the previous quarter.

Q/Q YR/YR
Q1 Q2 Q1 Q2
Pensioner & beneficiary 0.7 0.0 2.4 2.0
Employee 0.5 0.1 1.5 1.3
Age Pensioner 0.8 0.1 2.4 2.0
Other Govt Transfer Recipient 0.6 0.0 2.5 2.0
Self-funded retiree 0.2 0.2 2.0 1.8
Headline CPI  0.5 0.2 2.1 1.9

 

Building Approvals data shows the tide is turning in QLD

Today’s ABS data on residential building approvals in June confirms the slow turnaround in the sector in Queensland. For the 6th consecutive month we see Trend approvals up for the month and the year-on-year decline now at its slowest rate since Sept 2016.

On the Trend basis total approvals in QLD were up 1.1% m/m for a decline of 14.7% y/y. The growth is coming from houses (up 2.2% m/m) while unit approvals remain largely stable (down 0.5% m/m).

Across the nation approvals were up just 0.1% m/m and remain down 14.9% from a year ago.

Time for ABS to step up with better data for the regions

For years we have been bemoaning the lack of quality data provided by the ABS at a regional (SA4) level. In particular the labour market data has been a major gripe of ours. How can we expect State and Local Governments to be making sensible policy decisions when they are fed sub-standard data on which to base those decisions?

At a State and National level the ABS provide Labour Force data on a seasonally adjusted (often taken as the “headline” number) and Trend basis. The ABS are very clear in their message that the Trend series, although not as headline grabbing as the seasonally adjusted, is the preferred measure. We agree.

However, when it comes to the regional data the Labour Force data is presented in its raw, unadjusted, original state. The ABS caution against using the monthly original data (as they should) and instead point users to the 12 month averages (which they also now helpfully provide for those unable to add up and divide by 12). These annual averages are taken as the “official” data for the regions and they are used by the Queensland Government Statistician’s Office, among others, in their regional labour market briefings. The problem here is that these annual averages are all but useless as an indicator about what is actually happening now, or at least in the recent past. Certainly no one would suggest that the annual average data was “good enough” at a State or National level; and certainly no one would accept it if that was presented as the basis for decision making.

The latest ABS Labour Force data for June gives us a good idea of the scale of the problem.

Consider the question “what is happening to employment in Queensland at the moment?”

To answer that question any sensible soul would head straight to the ABS Trend data for June and there they would discover that Trend employment in Queensland sits at 2,391,400 and has risen by 43,300 over the past year.

But if we wished to dig a little deeper and see where those gains were then we’re in trouble.

A look at the ABS annual average data for June tells us that Greater Brisbane has 1,182,900 people employed; a number which is up by 3,500 in the year. The Rest of Queensland employs 1,177,400 and has seen employment fall by 3,600 in the 12 months. How can this be right? Employment at only 2,360,300 (31,100 lower than the Trend) and having fallen by 100 over the year!?

This is why we created the Conus Trend and, despite some reasonable concerns about volatility in the underlying data, we are convinced that it is a major step towards a better understanding of regional labour forces. The Conus Trend for June shows employment in Greater Brisbane at 1,192,700 having risen 11,700 over the year. The Rest of Queensland stands at 1,198,800 and is up 31,700 for the year. That is a very different story to the “official” one told by the ABS annual average but is consistent with the ABS Trend data for Queensland.

At a regional level the differences can also be stark.

  • In Cairns the annual average has employment up 6,300 for the year and the unemployment rate at 6.3%. The Conus Trend is much stronger with employment growth of 12,700 and an unemployment rate of 5.3%.
  • A similar story emerges in Townsville where the “official” unemployment rate is 9.7% while we estimate it at 7.5%.
  • And it’s not all one way; in Fitzroy the annual average shows a loss of 1,500 jobs for the year while the Trend estimates it as a 8,900 fall.

The point, I hope, is clear. The “official” annual average data is in no way reflective of the reality on the ground and therefore cannot be a sensible basis for decision making.

I understand that the ABS has limited resources and feels unable to complete the work required at a SA4 level to provide a series they are happy with. I can appreciate that problem (although at Conus we too have only limited resources and yet have managed to do the work for QLD, NSW and Victoria!…see the full data sets here), but what about taking a preliminary step and providing ABS Trend data at the “Capital and Rest of State” level? Such a move would indicate a genuine commitment from the ABS to the provision of better regional data (and therefore decision making) and provide State and Local governments with a far better idea about what is going on in their Labour Markets.

We’re encouraged that many more people are now using the Conus Trend data that we make available but frankly would prefer to see the ABS step into the breech, even if only in a limited way, and help out the regions.

The growth in “secondary jobs” might not be coming from where you would expect

Last week the ABS produced their first release of the new Labour Account data series (see commentary here) which, among other things, gives us an insight into the number, and industries, of “main” and “secondary” jobs. To be clear the ABS define these terms as:-

  • Labour Account main job
    • Labour Account main job is the main activity carried out by an employed person. In the Australian context, this is the job in which most hours are usually worked. An employed person can only have one main job.
  • Labour Account secondary job
    • Labour Account secondary job is any job held by an employed person, other than main job. A person can have multiple secondary jobs.

As we noted last week, secondary jobs growth over the past five years has been at a faster pace (+1.8% pa compound over the period) than for main jobs (+1.3% pa). In 2015-16 secondary jobs accounted for 5.8% of all jobs, up from 5.7% in 2010-11.

However, when we consider the industry breakdown of this data some surprises become evident.

When we consider those industries with the largest number of secondary jobs (Admin & Support Services, Health Care, Education & Training and Accommodation & Food Service which together make up 54% of all secondary jobs) we see a decline in the percentage of total jobs that are secondary in virtually all sectors.

  • Admin & Support Services fell from 17.3% of total sector jobs in 2010-11 to 16.% in 2015-16
  • Health Care edged slightly higher from 6.8% to 6.9%
  • Education & Training fell from 9.5% to 9.0%
  • Accommodation & Food Service fell from 7.3% to 7.1%

So in which industries have we seen the most growth in secondary jobs? Increases in the percentages of total jobs coming from secondary jobs have been spread across many industry sectors but those that warrant particular attention are:-

  • Wholesale Trade which has seen the percentage raise from 4.9% in 2010-11 to 5.6% in 2015-16
  • Rental, Hiring & Real Estate services which have seen a 29% increase in secondary jobs over the 5 years and the percentage rise from 4.9% to 6.1%
  • Professional Services have seen secondary jobs jump from 4.4% of total jobs to 4.8%; secondary jobs are up 32% over the 5 years
  • Retail Trade (which is the fifth biggest secondary job sector) has seen a 13.7% increase in secondary jobs since 2010-11 and their share of total jobs increase from 4.4% to 4.9%

 

Regional jobs data shows Cairns powering ahead

Today’s release by the ABS of regional jobs data, and our own Conus Trend analysis of that unadjusted data, shows Cairns powering ahead with the Trend unemployment rate falling to 5.3%. This is the lowest rate the region has seen since September 2008. Trend jobs have increased by 1,300 since May and are up 12,700 on the year. Of those 7,800 have come in full-time positions with the Trend Participation rate increasing to 63.0, its highest level since October 2013.

Townsville, despite adding just 900 more jobs this month, sees Trend unemployment at 7.5% (down from 7.8% in May, although this was revised sharply higher from 6.3% in original estimates). Over the past year Townsville has added 13,400 new Trend jobs (coming from a low base) with 10,000 of those being full-time.

The regions generally have done better than Greater Brisbane with the Trend unemployment rate in the Rest of Qld falling to 6.0% while Greater Brisbane has risen to 6.7% (Trend rates in Qld now stand at 6.3% and 5.6% across the nation). Over the year the Rest of Queensland has added 31,700 new jobs (22,300 of which have been full-time) while Greater Brisbane has added just 11,700 new Trend jobs (while losing 8,200 full-time jobs).

The employment to population ratios in both Cairns and Townsville show the significant recovery the 2 regions have seen over the past year.

Note..CORRECTED. Youth unemployment in Cairns has risen slightly to 12.6% (although May’s number was revised down from 12.5%) with the addition of 3,400 youth jobs over the past year. Youth unemployment in Townsville has dipped to 18.4% (after May was revised up to 18.9%) although the region has lost 800 Trend youth jobs in the year.

The full set of Conus Trend Jobs for the Qld regions is available for download below. Please feel free to use this data (for non-commercial purposes) but we would appreciate you acknowledging Conus when you do so.

Conus Trend Regional Jobs QLD – June 2017