Dept of Employment SALM data confirms the improvement in the North

After yesterday’s ABS regional jobs data (see here) showed continued improvement in the labour force measures in the Cairns and Townsville SA4 areas, today we get the Dept of Employment’s, much awaited, quarterly Small Area Labour Market (SALM) data for the second quarter which allows us to consider data at the local government area level.

The SALM estimates are created using data from Centrelink of people in receipt of Newstart and Youth Allowance by postcode, the ABS regional labour market data at SA4 level and the Census labour force data at SA2 level. These data sets are used to create the SALM estimations using a methodology called Structure Preserving Estimation (SPREE). Due to the highly volatile nature of this data the Dept presents the data on a smoothed 4 quarters moving average basis for Local Government Areas. This creates a very lagged measure so we have utilised the original, un-smoothed  data (which is hidden away on the Dept website) to create a Conus Trend series for our local LGA regions.

This shows Trend SALM unemployment rates at 6.3% (unchanged from March) for Cairns Regional Council, a rate of 6.6% (down from 6.7% in March) for the Cassowary Coast Regional Council area and 8.2% (down from 9.1% in March) for the Townsville City Council area.

The Conus Trend analysis of the derived SALM employment data shows Cairns Regional Council area adding 5,900 employed for the year to June 2017, Cassowary Coast Regional Council area added 880 and Townsville City Council area added 5,600.

Note: Given the different methodologies used to calculate the two different series, comparisons between the SALM and ABS Labour Force data (and the derived Conus Trend data) need to be treated with caution.

Regional jobs data shows regional QLD employment growth at fastest pace in a decade

The ABS released their original, unadjusted regional labour force data for Sept this morning. We need to consider the Conus Trend series to make much sense of this highly volatile data series.

When we consider the split between the Greater Brisbane and Rest of Queensland areas we see that the recent trend of out-performance from the regions remains in place, although total employment growth in the capital was slightly better than the regions this month. The biggest divergence is seen when we consider full-time and part-time employment. Over the past year Greater Brisbane has added 38,200 to Trend employment, although all of those have been in part-time positions with full-time employment down 1,800. In the Rest of Queensland Trend employment has grown by 57,700 this year with fully 39,900 of those in the full-time sector.

Trend employment growth in the Rest of Queensland is now at 5.0%, which is the fastest pace in more than a decade. Greater Brisbane employment growth sits at 3.2%, which is still better than the national average of 2.8%.

In our own region we once again see the Trend unemployment rate in Cairns hovering around the 5% mark, the Sept Conus Trend unemployment rate sits at 5.2% (up slightly from a downwardly revised 5.2% last month). The Trend unemployment rate has been between 5.5% and 4.9% for the past 7 months with Trend employment stable this month but up 9,100 over the course of the year. As is the case for the Rest of Queensland, full-time employment has been the stand-out performing sector for Cairns with Trend full-time employment up 10,500 in the past 12 months (and up 600 this month) while part-time employment has dropped slightly.

Trend employment is growing at a very healthy 8.2% in Cairns.

To our south in Townsville there might be some concern that the recent stellar recovery is starting to look less resilient (at least so far as the headlines might be concerned). Trend employment edged higher (by 100) this month and remains up 15,500 higher over the past 12 months. However, the Trend unemployment rate is back up to 9.0% (after August was revised up to 8.5%) which may give some cause for concern. However, we should note that this is on the back of a rally in participation to levels not seen in more than  2 years.

Trend employment is growing at a state high of 16.0% in Townsville.

The youth sector, which has been of concern in the north for some time, now appears to have stabilised at more “normal” levels, at least in Cairns. Trend Youth Unemployment Rate now sits at 12.3% in Cairns (well below the rate in the Rest of Queensland and only slightly higher than in Greater Brisbane) with 2,700 Trend jobs added in the past year. In Townsville the sector has been a real cause for worry and continues to be, despite the overall recovery in the region. Trend Youth Unemployment Rate sits at 22.1% (the third worst in the state after Wide Bay and the Outback), despite having added 2,800 Trend jobs in the past year.

The full set of Conus Trend regional jobs data is available for download below. Please feel free to use this data (for non-commercial purposes). We would appreciate you acknowledging Conus when you do so.

Conus Trend Regional Jobs QLD – Sept 2017

Beware the employment data from the Census?

Yesterday saw the release of the second tranche of Census 2016 data part of which included information relating to employment. However, we would suggest that we need to be careful when reading too much into the Census data as it relates to employment.

Employment is one of the few indicators that is measured (or at least estimated on the basis of a labour force survey) on a monthly basis by the ABS at a national, state and regional level. In addition the ABS also produce employment by industry data on a quarterly basis, also at a national, state and regional level. As regular readers will know, we have some concerns around the quality of the regional data and we therefore prefer the Conus Trend series for both the monthly Jobs data and the quarterly Industry Jobs data. Nevertheless, when we consider employment we feel confident that the ABS (and derived Conus) Trend series give us the best available indicator as to actual levels at the national, state and regional levels.

Certainly the ABS agree. To quote from their own information, provided with the Census release yesterday, “The Labour Force Survey produces the most authoritative and recent estimates of labour market information, including employment and unemployment”.

It is therefore worth considering how this data tallies with, or differs from, the Census data. And when we do that we see issues that force us to consider how much importance we should be attaching to the Census data in this area.

Employed
2011
Employed
2016
Change
11-16 %
Variance
ABS-Census %
Census ABS/Conus Census ABS/Conus Census ABS/Conus 2011 2016
Aus 10,058.3 11,222.7 10,683.8 11,941.5 +6.2 +6.4 11.6 11.8
QLD 2,039.3 2,279.7 2,136.5 2,342.4 +4.8 +2.8 11.8 9.6
RoQ 1,024.8 1,156.4 1,059.5 1,163.9 +3.4 +0.6 12.8 9.9
Cairns 102.9 114.1 106.1 109.0 +3.1 -4.5 10.9 2.7

Of particular note here, for our own area, is the fact that the Census suggests an increase of 3.1% in the number employed in Cairns SA4 over the period, while our own Conus Trend (derived from the ABS data) shows a 4.5% decline. Indeed for the Rest of Queensland as a whole the Census has a 3.4% increase while the Trend suggests virtually no change.

The Census also provides detail about industry of employment and here too we see some significant differences when considering the regional data.

  • While both Census and Trend agree that Healthcare was Cairn’s largest employment sector in August 2016, the Census suggests a 15% increase since 2011 while both the ABS annual average (-0.7%) and Conus Trend (-2.0%) have the sector falling slightly.
  • Education & Training has seen rapid growth but the Census has it running at +15.7% since 2011 while the ABS annual average suggests +112.4% and Conus Trend +81.5%
  • Accommodation & Food is an important sector for the region which the Census suggest is up 6.4% while both the ABS and Conus have it down (44% and 33.6% respectively) since 2011.
  • Manufacturing exhibits some wide variances. The Census has the sector falling by 20.1% since 2011 while the ABS annual average is up 2.6% and the Conus Trend up 39.9%. Recent rises in the sector (which are more rapidly reflected in the Trend than the annual average are likely part of the reason for the seeming paradox).
  • Despite well documented increases in Public Administration jobs, the Census has the sector in Cairns virtually unchanged while the Conus Trend estimates an 18.0% rise.
  • Retail Trade has seen employment fall across all measures since 2011 but the Census has just a 8.7% drop, the Conus Trend suggests down 20.7% and the ABS annual average is a thumping decline of 33.4%.

So who do we believe? I would suggest, as the ABS themselves do, that we focus on the ABS Labour Force data (and, where appropriate the derived Conus Trends) when we are discussing employment and industry of employment. The Census comes into its own when considering issues such as hours worked, unpaid work done and other indicators not adequately covered within the standard monthly or quarterly ABS data releases.

Building Approvals jump in the Far North

The ABS released their (original, unadjusted) residential building approvals at the SA4 and LGA level this morning; and they reveal good news for the Far North. As always, this highly volatile data set needs to be seen through the lens of the Conus Trend to make any real sense of it.

When we consider the data at the SA4 level we see the original data for Cairns up at a more-than-9-year high. However, even when looking at the Conus Trend we see a significantly improved story. Trend approvals increase to 107 in August after July was revised sharply higher to 103. Trend residential approvals are now up 15.9% y/y; the best result since March 2015.

Unfortunately, to our south in the Townsville SA4 region things are not as rosy. Here Trend approvals fell in August to 75 after July was revised slightly lower to 77. Year-on-year Trend approvals are down 7.4%.

As the second chart below makes clear. the recent recovery in approvals across the state is coming largely from Greater Brisbane with the Rest of Queensland still lagging well behind.

We can also consider the Conus Trend data for the LGAs within the Cairns SA4 region and here we see that the improvements have been seen in Cairns Regional, Cassowary Coast Regional and Tablelands Regional Council areas. Cairns Regional Council Conus Trend approvals (incl Douglas Shire) rose to 77 in August after July was revised strongly higher to 76; year-on-year this represents a 30.3% increase. In the Cassowary Coast Regional Council (where the original data saw a higher number of approvals than in any month since June 2005) the Trend rose to 9 which is a 44.8% y/y increase. On the Tablelands (Tablelands Regional plus Mareeba Shire Councils) Trend approvals also rose to 21 after July was revised stronger; however approvals remain down 6.4% from a year ago.

In the Townsville City Council area Trend approvals fell to 69 after July was revised lower to 71; they are now down 5.5% from a year ago.

The full set of Conus Trend Residential Building Approvals for all the SA4 regions in Queensland 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.

Conus Trend Regional Building Approvals QLD – Aug 2017

More bad news for TNQ in the National Visitor Survey

The June quarter National Visitor Survey from Tourism Research Australia was released this morning (see here for full details), and it confirms the deteriorating story for the region we’ve been discussing for some time (see commentary from last quarter).

Across the nation domestic overnight visits rose 5.2% y/y and were up 6.2% in Queensland. However, in our own region TNQ saw a decline of 4.0%. Of even greater concern is the fact that expenditure from those overnight visitors fell by 9.1% (which is more than a 10% decline when considered in real, inflation-adjusted terms). The average number of nights also fell from 5.11 nights year ago to 4.89 nights now. TNQ now accounts for just 1.93% of all Australian domestic overnight visits; its lowest share of the market since the post-Yasi period in 2011.

 

Domestic day-trips fared somewhat better and were up 2.6% y/y with expenditure up 0.8% y/y. However, this sector accounts for just 12% of total domestic expenditure in the region.

Overall total domestic expenditure (for both overnight and day trips) in TNQ fell 8.0% in the year to June 2017. With international expenditure in the region also falling slightly in June (down 0.4% y/y) despite the solid pick-up in international tourist numbers, we see total visitor expenditure in the region falling by 5.6% (or closer to 7.5% in real terms) over the year. This is a reduction in visitor spending of almost $200 million over the past 12 months and would go a long way to explaining the seeming disconnect between the “booming” tourism numbers being recorded and the reality on the ground for many operators in the Far North.

 

Cairns Conus Trend “Job Seeker” rate hits lowest in almost 3 years

Regular readers will be well aware that there are various ways to look at the labour market; the standard “unemployment rate” being just one of them. Another, less well known measure, is provided by way of the Dept of Social Services data in their monthly payment recipients release (available here).

When looking at the data for our region we sum the Dept of Social Service totals for the Atherton, Cairns, Innisfail, Mareeba, Mossman and Yarrabah Service Zones. These Service Zones, when taken together, may not precisely correspond to the Cairns SA4 region but are as good an approximation as we can get. Given the volatile nature of this original, unadjusted data series we have created a Conus Trend Job Seekers Rate using the trend number of payment recipients as a percentage of the Conus Trend Labour Force.

It needs stressing that how the Dept of Social Service count those who are seeking jobs and receiving allowances is very different from how the ABS define someone as “unemployed”. The rules around who receives what allowance also change over time so this is a data set that has to be treated with caution if making comparisons over periods when changes have occurred. As a result of these caveats we stress that the absolute levels may be difficult to reconcile with other measures, but the movements in Trends (at least over periods when rules don’t change) can provide us with useful supporting evidence.

It would seem that the improvements being seen in the Conus Trend series over the previous few years are being reflected in the Conus Trend Job Seekers rate which fell in July to 8% (from 8.1% in June). This has fallen from a recent high of 8.8% in Oct 2015 and is now at its lowest level since Oct 2014.

Regional Building Approvals; no joy for the North

The release of the regional building approvals data by the ABS today allows us to update our Conus Trend series for the SA4 and Local Govt Areas.

What we find is a story of slightly weaker, but generally stable, approvals in the North. The Cairns SA4 region sees Trend approvals stable at 77 after June was revised down from 80. Townsville SA4 falls slightly to 79 after June was revised up from 78 to 80. The picture at the LGA level is similar.

Cairns Regional Council (incl. Douglas Shire) fell to 53 after June was revised down from 56 to 54. Cassowary Coast Regional Council was stable at 6 after June was revised up from 5, Tablelands Regional Council (incl Mareeba Shire) was stable at 18 and Townsville City Council was also stable at 72, although June was revised up from 68.

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

Conus Trend Regional Building Approvals QLD – Jul 2017

Chinese visitors to TNQ fall for first time in almost eight years

Further data from TRA for the TNQ region highlights the concern we flagged earlier today. Over the past year the once-booming Chinese sector of the market has seen a decline in the region of 1.2%. Chinese visitors to TNQ fell from 216,726 in the year to June 2016 to 214,082 in the year to June 2017. This is the lowest annual number since March 2016 and is down 6.7% from the highs seen six months ago.

Visitor numbers from the USA continue to grow (up 5.5% y/y) along with Japan (up 5.4%). The UK has contracted over the past 6 months and is down 5.6% for the year to the lowest level since Dec 2015.

International Visitor growth leaves Queensland behind

Today sees the release of the June quarter International Visitor Survey from Tourism Research Australia (full report available here); and although visitor numbers are up strongly it’s not a happy story for Queensland.

Visitor numbers to Australia show a 8.7% y/y increase to almost 7.9 million (another new record high). Expenditure also rose strongly, up 10%, to almost $27.9 billion over the year. Average spend per visitor rose 1.1%, barely in line with inflation.

Queensland’s data was far less impressive. Visitor numbers rose 5.6% which was the weakest increase across all states and territories. Expenditure in Queensland was up an even weaker 3.2% (also the slowest of all states and territories) which resulted in average spend per visitor which fell 2.3% to $1,998. Queensland’s share of the total international visitor market has now fallen to an all time low of just 33.2%; it stood as high as 43% a decade ago.

In our own region, despite the impact of surging Chinese visitors, things are weaker still. Total visitor numbers to TNQ were up just 4.4% for the year while total expenditure actually fell by 0.4%. The average spend per visitor to TNQ is down a disturbing 4.8% over the year (in real terms this is in excess of a 6% decline). These are numbers that must be concerning for the new CEO at TTNQ and should give pause for thought to all those involved in the industry in the North. What is it that the region is not offering to international visitors such that the region’s share of the international market continues to languish close to all time lows?

We shall post further breakdown of the TNQ data once we receive more detailed numbers from TRA later today.

The June National Visitor Survey is due for release in a fortnight.