Mixed bag from the jobs report for QLD

The Labour Force data for October released this morning by the ABS showed employment up 3,700 (s.a) or 20,000 (Trend) for the nation with the headline, seasonally adjusted unemployment rate dipping to 5.4% (the Trend remained stable at 5.5%). Participation fell slightly to 65.1 (from 65.2) and this will have helped with the Unemp Rate dip despite the slower monthly employment increase. Full time employment was up a healthy 24,300 (s.a.) and is now up 297,900 for the year; or 83.8% of all employment gains.

In Queensland the story was somewhat less clear. After the decline in employment last month (down 4,400) a rebound in Oct was expected, and duly delivered with an increase of 12,600 (s.a.) or 7,900 (Trend). However, a sharpish move up in Participation (to 65.8 from 65.5) saw the headline unemployment rate lift to 6.0% s.a. (from 5.9%). The Trend unemployment rate remained static at 5.9%. The move up in Participation, while helping to push the unemployment rate higher, should be viewed as a positive; particularly given that Participation now sits at its highest level since August 2014 (if we ignore a rather bizarre plot in Jan 2016 at 66.2 which saw the headline unemployment rate that month jump to 6,5% and promptly fall to 5.5% the next!).

Employment growth in QLD is now running at a Trend rate of 4.6% y/y (the fastest state) against a national average of 2.9%. Nevertheless, while it is true that employment increase in QLD over the past year account for fully 37% of the nation’s growth (seasonally adjusted), we should also note that the state only accounted for 21% of the growth in full-time employment. In QLD full-time employment makes up less than half of employment growth this year, against the national figure of almost 84%.

The bottom line is that there is ammunition here for both Government and Opposition campaigns in the final days as we run up to Nov 25th. Expect to see Government members talking up the Trend total data (see chart below) while the Opposition will no doubt focus on the relative weakness in full-time employment.

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.

Another strong jobs report. QLD Trend remains positive

The ABS data for the labour market in September shows another strong result with employment up 19,800 (expectations had centred around +15K) and the unemployment rate (seasonally adjusted) falling to 5.5%. Employment growth in August was revised sharply stronger to an increase of 53,000 (originally) 27,100. So, although stronger than expected Sept now shows as the weakest month of growth in the past 7 months. Full-time employment was up 6,100 while the Participation Rate remained unchanged at 65.2 (after Aug was revised down slightly). Trend employment is now growing at 2.8% y/y.

In Queensland the headline (seasonally adjusted) numbers were not as positive with employment falling 4,400 (although full-time employment rose 3,000) and the unemployment rate rising to 5.9% (from 5.7%). However, the Trend series (less volatile and preferred as an indicator) had employment up 7,500 (the weakest month of growth this year) and the unemployment rate dropping slightly to 5.9% from 6.0% previously. Trend employment growth in Queensland now sits at a healthy 4.1% y/y.

Regional jobs data will be released next Thursday at which time we will be producing the Conus Trend Regional Jobs data.

 

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.