Online Retail and the impact on regional employment

We all know that the Retail sector is facing a huge disruption in the form of online shopping. It’s been so for a while now and, with the emergence of Amazon in Australia soon, is only likely to become more pronounced.

Digging into the quarterly industry jobs (and in particular the Conus Trend Industry Jobs series which provides a more timely analysis than the original ABS data which is presented as a 4-quarters average) we can see the impact of this disruption on employment in the sector. In August we saw a total employment in the Retail Trade sector in Queensland of 250,800 (which was a decline of 400 from a year ago) but more crucially that figure represents just 10.7% of the total Queensland employment figure…which is the lowest since this data set started back in August 1999. In August 1999 that share sat at 12% (that’s a relative loss of more than 39,000 jobs in retail).

In the course of the last 18 years total jobs in the sector have increased by 56,900 with 33,700 of those coming in the Greater Brisbane area and 23,200 from the Rest of Queensland. However, in the past 6 years, as the online disruption has taken hold, we’ve seen total jobs in the sector rise just 4,900. And it would appear that the impact is being felt more keenly in the regions; Greater Brisbane has seen an increase of 14,900 jobs in that time while the Rest of Queensland has lost 10,000. If we look 4 years ago we see the sector losing jobs overall with Greater Brisbane up just 6,500 while the Rest of Queensland has fallen 15,600. 

Even when we consider the past year we see Greater Brisbane adding 5,600 new retail jobs while the regions lost 6,000. Jobs in the sector in Greater Brisbane are close to all-time highs while in the regions they are almost 16,000 below highs (about 4 years ago). The evidence appears clear; the regions are suffering far more from the online shopping disruption that the capital. It is perhaps not too hard to see why that might be the case. If access to quality, diverse and plentiful shopping (like in Greater Brisbane) is more difficult because of remoteness and size of market (like in most of the regions) then it is hardly surprising to see the traditional bricks-and-mortar stores suffering at the hands of online alternatives.

The story across the regions is not, of course, uniform but it is the case that almost every region has seen a reduction in retail sector jobs since those 2013 highs.  In the past 18 years the only two regions that have seen significant growth in retail sector jobs (despite a massive increase in employment generally) have been the Gold Coast and the Sunshine Coast.

The continued disruption of the retail sector, and the inevitable impact that will have on retails jobs, appears destined to impact the regions to a far greater extent than it does the Greater Brisbane area. 

Strong jobs growth. QLD strongest growth since GFC

The ABS data for Labour Force in August has shown a very strong growth in employment (up 54,200, seasonally adjusted) smashing market expectations of a 17,500 rise.  Back months were also revised higher. Employment is now up 325,600 in the past 12 months. Full-time employment reversed a decline in July to rise by 40,100 and is now up 251,200 (or 77% of employment growth). The seasonally adjusted unemployment rate now sits at 5.6% (which is down from 5.7% last month, although this was only revised up from 5.6% last week during an ABS rebenchmarking exercise!).

The less volatile Trend series shows employment up 27,100 in August (up 307,300 for the year). The Trend unemployment rate was stable at 5.6%. With Participation also increasing by 0.2 ppts there can be little doubt these are strong numbers.

Queensland too saw some strong numbers. Seasonally adjusted employment was up 16,700 (after June was revised higher) with full-time employment up 14,700. Over the course of the past 12 months employment is up 95,400 although only 19.5% of those were full-time. The headline unemployment rate has fallen sharply to 5.7% as Participation remained unchanged. The Trend series shows employment up 10,600 for the month and 87,200 for the year with the Trend unemployment rate falling to 6.0% (after July was revised down to 6.1% from 6.3%).

As the chart below makes clear, the last few months have been good ones for the QLD labour market as a whole although there will still be concern at the low number of full-time positions being created. However, with annual employment growth of 3.7% (and 3.2% last month) this is the strongest period of growth in QLD employment since the GFC. A government considering the timing of an election are likely looking at these numbers with a certain amount of pleasure.

Regional labour force data will be released by the ABS next Thursday at which point we will be updating our Conus Jobs Trend and quarterly Conus Industry Jobs Trend series

 

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 Jobs; more good news for the North

Today we saw the release of the ABS regional jobs unadjusted data for July. As always, we have to consider the Conus Trend data to make much sense of this highly volatile data-set; and what that shows us is a continuing good-news story in the North.

Trend employment in the Cairns SA4 region has increased by 800 in July to 120,200. The Trend unemployment rate has remained stable at 5.0% (but only after June was revised down from 5.3%). Trend Participation has also increased to 63.1 and is now at its highest level since Oct 2013. Over the year a total of 12,500 extra people are employed with 9,700 of those in the form of full-time employment.

In Townsville the ongoing recovery continues with Trend employment increasing by another 1,000 in July to 111,200. This is an increase of 15,700 over the past 12 months with 9,500 of those full-time positions. Trend unemployment has fallen again to 6.3% which is the region’s lowest since Nov 2013. Participation in Townsville has also increased in July to 62.7. Trend employment growth in Townsville now sits an annual rate of 16.5%, the highest in the state and well above the state average of 2.7%.

As we have been seeing for some time, the regions are beating Greater Brisbane in the race for jobs. The Rest of Queensland has added 45,100 Trend employment in the past 12 months while Greater Brisbane is up just 18,900. Trend employment growth in Greater Brisbane is running at 1.6% pa while in the Rest of Queensland it sits at 3.9%. More starkly, full-time employment in the Rest of Queensland is up 33,800 over the period while it has fallen by 12,700 in the capital.

Youth unemployment remains a concern in Townsville where the Trend rate of unemployment in the 15-24 year old cohort has increased to 18.7% (3rd highest in the state) despite 1,000 more Trend employed in the age group. In Cairns Trend youth unemployment also nudged higher to 11.5% in July but only after June was revised sharply lower from 12.6%; the region has added 3,300 new Trend employment in the group over the past 12 months.

The full Conus Trend data-set is available for free download below (for non-commercial use). We would appreciate you acknowledging Conus when you use it.

Conus Trend Regional Jobs QLD – July 2017

 

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.

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.

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.