ABS changes to Labour Force data from 2013 still distorting Cairns youth data?

There has been much talk recently about the very high level of youth unemployment in the Cairns region; and rightly so. We’ve been taking a close look at the issue for some time and believe that the Conus Trend data series we’ve developed gives us the best and clearest picture of what is actually happening. When we consider the chart below what we immediately notice is a sharp move in the rate of Youth unemployment from early 2013. Prior to this time the Cairns youth unemployment rate, whilst highly volatile, was generally trending around the averages for the Rest of Queensland and Greater Brisbane; as was Townsville. Back in early 2015, when I first started creating the Conus Trend series for youth unemployment I noticed this issue and contacted the ABS to see if they might have some explanation.

At that time I was informed by the ABS that the issue most likely came about due to the changes in geographical standards implemented by the ABS in the first half of 2013 (in our case this meant a change from “Far North Queensland” as the designated region to the SA4 region of “Cairns”) and they noted that it only appeared to be an issue in the Cairns region.

In addition, between May and August 2013, the ABS rolled out a new Labour Force Survey (LFS) sample design (part of which related to the change to ASGS, the new geographical standard). At that time the ABS said that the “changes arising from the introduction of the ASGS, together with the introduction of the new sample (the new sample selected to represent each region may have different characteristics to the old sample) is likely to cause significant disturbance to Regional statistics from the LFS for May to August 2013 as the new LFS sample is gradually implemented.

The issue is limited to the youth cohort since when we consider the other age cohorts in the Cairns region we do not see anything like this kind of “disturbance”.

It would appear that this “significant disturbance” may still be plaguing our Cairns regional LFS youth data.

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How to use and abuse statistics; a lesson from both LNP and ALP

My previous posts on the levels of youth unemployment in the Queensland regions has certainly created some interest. In a story in today’s Courier Mail both sides of the political divide have attempted to use the original, unadjusted ABS data on youth jobs to score points. As is too often the case the reality is rather different.

Firstly let’s take a look at the LNP claim that “about 11,000 young people have lost their jobs since the last election”. Given the last election was held on Jan 31st 2015 we shall use the Feb 2015 data as our starting point. The original ABS youth employment data for Queensland shows 400,700 young employed for that month. For May 2016 (latest available data) that number is 390,100; a loss of 10,600 which is certainly “about 11,000″…so far so good. However, what theses unadjusted numbers do not tell us (and the reason we must prefer our own Conus Trend series) is the effect of seasonal variation in this data set. Youth employment numbers are historically and consistently much higher in Dec, Jan and Feb than at other times of the year. If the LNP has used Mar 2015 as their starting point the difference would have been PLUS 11,800! The fact is that using “since the election” is a classic case of cherry-picking data to make a point. When we consider the Conus Trend data (which accounts for this kind of seasonality) we see youth employment since Feb 2015 has fallen just 300.

As if not to be outdone with the manipulation of data the Government’s Employment Minister Grace Grace claims that “youth unemployment has fallen in nine out of 12 statistical divisions in southeast Queensland”.This claim is tougher to address given that Grace has not specified a time frame as to since when “youth unemployment has fallen”. Also, does she mean actual unemployment numbers or the unemployment rate? If we assume she means exactly what she says (i.e. youth unemployment) rather than what we might think (i.e. youth unemployment rate) then of the 12 SEQ SA4 regions (those in Greater Brisbane) plus Gold Coast, Toowoomba and Darling Downs-Maranoa over the past month 8 have fallen….this is the closest we can get to what Grace is claiming. However, if we consider the original data from a year before then only 5 have fallen with the other 7 all up.

If Grace is referring to the youth unemployment rate then the original ABS data shows 7 fell over the past month but only 4 were down over the year. So even allowing for the use of the ABS original data, and looking at actual unemployment (rather than the rate) Grace’s statement is hard to back up. If we consider the Conus Trend Youth Unemployment Rates for these 12 regions we see 5 have rates which have fallen both from last month and last year.

The moral here is that using the ABS original data is fraught with danger and wide-open to cherry picking abuse. When we consider the Conus Trend data for youth unemployment we see that jobs have remained broadly stable over the course of the year. The Conus Trend Youth Unemployment Rate for the Greater Brisbane area is unchanged at 12.0% while for the Rest of Queensland it has actually fallen to 14% (from 15.6%); the issue of youth unemployment in Queensland is regionally very patchy and there is clearly no state-wide disaster at hand.

Taking a look at unemployment rates throughout Queensland by age

We have been working on completing the data set for Conus Trend unemployment rates for all the SA4 regions in Queensland by age groups and have now completed it. What the full data set shows us is an interesting look into the make-up of the unemployment challenge facing the State. We have used three age groupings; Youth (15-24 years), Middle (25-44 years) and Older (45+ years). Below we list the worst 6 regions in each age grouping as at May 2016 (latest data) based on the Conus Trend.

Youth Unemployment rate Middle Unemployment rate Older Unemployment rate
Outback 34.4 Outback 15.0 Mackay 8.3
Cairns 31.3 Townsville 11.1 Townsville 7.4
Wide Bay 22.2 Wide Bay 8.8 Ipswich 6.9
Moreton Bay-North 19.8 Cairns 8.7 Moreton Bay-North 5.5
Logan-Beaudesert 16.0 Ipswich 8.4 Wide Bay 5.4
Townsville 15.6 Darling Downs-Maranoa 7.7 Outback 4.9

We need to bear in mind that the size of the labour forces is each age grouping are very different. The Middle group is between 2.5 and 3 times as large as Youth; while Older is between 2.1 and 2.7 times larger than Youth. Obviously therefore, the rates of unemployment in the Middle and Older cohorts have a larger impact on total unemployment rates than does Youth. It is therefore not surprising, given that Townsville appears in second place in both these larger groups that it features so badly as a whole; total unemployment in Townsville stands at 11.0% (behind only Outback at 11.1%). Cairns is in third place at 10.1% (solely on the back of its very high Youth unemployment rate) with Wide Bay (9.5%), Ipswich (9.2%) and Moreton Bay-North (8.4%) coming along behind.

Both Cairns and Townsville see labour markets deteriorating in May

Today saw the release of the ABS regional labour market data from which we have created our Conus Trend series data. Despite anecdotal evidence of improvements in the Cairns region (particularly in the tourism sector), the Trend jobs data deteriorated further in May; as it did in Townsville. The two northern regional areas now sit in second and third places with regard to unemployment rates in Queensland.

Cairns saw the ABS original unemployment rate jump to 11%. The Conus Trend series showed Trend unemployment at 10.2% (while April was revised up from 9.3% to 9.8%). Trend employment fell again in May (down 800) which brings the total for the past 12 months to a fall of 2,700. A fall in Trend Participation Rate over the year from 60.9 to 59.7 has helped to mitigate some of the rise in Trend Unemployment Rate but the second chart below makes clear the impact the labour market weakness is having when we consider the Employment:Working Population measure.

In Townsville the bad news continues. The original ABS data showed an unemployment rate at 13.3% but the Conus Trend Unemployment Rate came in at 11.1% (after April was revised up from 10.5% to 10.7%); only the Outback with a Trend rate of 11.2% is worse. Trend employment fell again (down 1,800) although the large decline in April was revised slightly better (from -2,100 to -1,600). Nevertheless Trend employment in Townsville has fallen by 14,200 over the past year. As is the case with Cairns, a rapidly declining Trend Participation Rate has helped to ease some of the impact on the unemployment rate but the Employment:Working Population measure shows a massive collapse.

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We have taken a closer look into the demographic make-up of these monthly regional labour market data and compared Cairns with Townsville. The result is interesting.

In Cairns, we we know, the real issue revolves around the young (15-24 yo) sector. Here we see the Conus Trend Unemployment Rate at 31.3% (down slightly from 32.8% last month) which is the fourth consecutive month of rates above 30%. Trend Youth employment has fallen by 2,000 in the past 12 months. When we consider the older cohort (45+ yo) then we see a different picture with a Trend Unemployment Rate at 4.3% (up slightly from 4.1% last month) even though this cohort has lost 1,400 in the past year. In the “middle aged” (25-44 yo) sector we see a Trend Unemployment Rate of 8.7% (up from 8.2% previously) but an addition of 710 Trend jobs in the past 12 months.

It is the youth sector in Cairns that is the greatest cause for concern and responsible for the bulk of Trend job losses.

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In Townsville, by comparison, Youth Trend Unemployment sits at “just” 15.6% and the sector has added 3,090 Trend jobs over the year. The older cohort has a Trend Unemployment Rate of 7.4% and has lost 3,230 Trend jobs over the year. While the middle aged Trend Unemployment Rate is 11.1% and this cohort have lost 13,940 Trend jobs.

The problem for the Townsville region rests squarely with this middle aged cohort where the vast bulk of the jobs have been lost.

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The full QLD Regions labour force Conus Trend data set is available for download below or on our Reports page. Please feel free to use this data but we would appreciate you acknowledging Conus if you do so.

Conus Trend Qld Regional Jobs – May 2016

 

April jobs numbers are horrible for the North

After the disappointing April labour force data for QLD released last week (see here) which saw the State unemployment rate lift to 6.5% we were bracing for some weak regional data today. The reality was worse then we had been expecting.

As always when considering the ABS Regional Labour Force Data we must focus our attention on the Conus Trend series rather than the (highly volatile) ABS original data. What we see in April are significant declines.

In Cairns the Conus Trend Employment data shows a 400 decline (with March revised lower). The total Trend Employed now sits at 108,500 which is 100 below the level seen a year ago. The Trend Unemployment Rate has risen to 9.3% with March revised up to 8.8%; Cairns now sits as 4th worst in QLD. The ABS original data sat at 9.8%

The story in Townsville is far worse still. Here we see the Trend Employment number slide to 98,400 (down 1,500 from March) which is a thumping 11,900 lower than a year ago and the lowest Trend Employment number since Jan 2005. The unemployment rate would be even worse were it not for a sharp fall in the Trend Participation Rate which is now at its lowest level since we started Conus Trend calculations in Oct 1998. Townsville now has the highest level of Trend Unemployment in the State at 10.5%. The ABS original data was a shocking 13.9%!

As the second graph below clearly shows, the employment situation in both Cairns and (particularly) Townsville are at shocking levels.

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Looking into the Cairns data in more detail we see a very worrying story when we consider Youth. Youth (15-24 year old) Trend Employment has again fallen in April (the 8th consecutive month of declines) with the Youth Trend Unemployment Rate soaring to 32% (from 31.7% in March, which was also revised sharply higher). The widely considered 12 month moving average youth unemployment rate in Cairns is now above 24% for the first time.1605263

The older cohort of workers (45+ years) has fared better despite Trend Employment falling for the second month. The Conus Trend Unemployment Rate for the older cohort rose just slightly to 4.4% (after March was revised down from 4.4%).

The full Conus Trend Queensland Regional Labour Force data is available for free download below and on our Reports page. Please feel free to use this data as you wish but kindly acknowledge Conus if you do so.

QLD Regions Jobs data – Conus Trend Apr 2016

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Regional jobs data is a Tale of 2 Cities in the North

Today’s release of ABS Regional Labour Market data is a very clear tale of two very different cities in the north of the State.

Once we have adjusted the raw ABS data, and therefore created the Conus Trend series, we see that Trend Employment in Cairns rose by 400 in March (after Feb was revised higher to +700). Over the course of the past 12 months Trend Employment in Cairns is up 3,300. However, this seemingly positive result is rather tempered by the realisation that an increase in Trend Participation over the same period (from 60.3 to 61.0) combined with an increasing population, has seen the Trend Unemployment Rate increase from 7.6% a year ago to 8.4% today (with Feb revised up to 8.0% from 7.6%). When we consider the Trend Employment:Working Population measure (which “sees through” this Participation effect) we see this has remained largely stable at 55.8. The conclusion we can draw from all this is that, although Trend employment growth is running at about 3%, this is less than sufficient to improve the overall employment picture given a slightly increasing Participation Rate and an increasing population.

The story in Townsville is less ambiguous. The Conus Trend Employment data shows employment in Townsville at its lowest level since Feb 2005 having fallen 1,500 in March and a total of 11,300 over the past year. Trend Participation has also fallen sharply over the course of the year (from 65.8 to 59.0) but this has not been enough to compensate for the falls in employment; the Trend Unemployment Rate in March stands at 8.8%, up from 7.8% a year ago. This is now the third worst rate in the state behind Ipswich (8.9%) and Outback Qld (13.1%..caution on this number!). Looking through the Participation impact (which has mitigated a much faster rise in Trend Unemployment Rate) we see the Trend Employment:Working Population measure down at 53.7 (having fallen from 60.7 a year ago). This data shows the employment situation in Townsville as unambiguously terrible. Given that the complete fall-out from the QN debacle is yet to be seen in this data we do not expect to see this improving anytime soon.

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Looking at the Cairns data in more detail shows us a continuing story of concern with regard to Youth Unemployment. The Conus Trend has youth unemployment sitting at 28.8% (up from 27.8% in Feb which in turn was revised up from 27.5%). With Trend Youth Employment having fallen for each of the past 11 months there is clearly much to worry about here.

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The older cohort (45 years and older) has also seen a decline in Trend Employment over the past two months but the Trend Unemployment Rate remains at 4.4% (unchanged from Feb which was revised from 3.9%).

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The full Conus Trend Queensland Regions labour force data is available for download below. Please feel free to use this data as you wish but we would appreciate acknowledgement if you do so.

QLD Regions Jobs data – Conus Trend Mar 2016

Cairns Unemployment Rate falls further

Today’s release of the (unadjusted) ABS labour force data for regions allows us to update our own Conus Trend series for the Queensland regions.

In Cairns we saw the Conus Trend unemployment rate fall to 7.2% (7.5% in Nov); its lowest level since Aug 2011. Trend employment in Dec increased by 400 (after a 300 increase in Nov), which takes the total increase in Trend employment for the year to 2,600 (or 217 per month, which suggests that the current rate of increase is running well above the annual average). This is the third consecutive month of increases in Trend employment following some solid gains in the first 5 months of the year. the Trend Participation Rate increased slightly to 60.1 from 60.0, while the Trend Employment:Working Population measure also ticked higher (to 55.6 from 55.3); although this remains historically low (see the second chart below).

In Townsville there was also some improvement in jobs numbers, although the overall picture remains weak. Trend employment increased by 200 (after a 100 increase in Nov) but this still means that in Trend terms 8,300 jobs have been lost in Townsville over the past year. The Conus Trend unemployment rate edged higher to 7.3% (from 7.1%) while both the Trend PR (up to 61.4) and the Employment:Working Population measure (up to 57.1) showed improvements. Of course, this data relates to a period before the recent job losses at Queensland Nickel. Although at this stage there is no indication that there will be any further large-scale jobs losses at the plant, we should note that (all other things being equal) if 700 jobs were to be lost from QNI, and all these workers registered as unemployed, then the Trend unemployment rate would be somewhere above 7.5% rather than 7.3%. i.e. loss of ALL of the QNI jobs could add 0.2% to the Townsville Trend unemployment rate.

Among all the Queensland regions, in Conus Trend terms, Cairns now sits in 5th position behind Outback Queensland (12.6%), Wide Bay (8.4%), Mackay and Townsville (7.3%).

UPDATE: Mark Beath over at Loose Change has an interesting post on the divergence in employment between the SE corner at the rest of Queensland.

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Looking at the Cairns data in more detail we see that Trend Youth unemployment has moved higher (to 20.2%) after what had seemed to be a solid improvement in previous months. However, although the unemployment rate does not look good we should note that Trend employment in the youth sector has increased by 300 (after +400 in Nov) and has now gone up in every of the past 11 months; we haven’t seen that happen since March 2009!

The older (45+) cohort of workers has seen healthy growth with Trend employment up 1,700 (+1,600 in Nov) and the Trend unemployment rate falling to 5.6% (from 6.2%).

What these two series tell us is that the “middle” section of workers (i.e. those between 25 and 45) must have lost approximately 1,600 Trend jobs in the month. Over the past 12 months the older cohort have gained 1,800 Trend jobs, the youth sector 1,700 Trend jobs and the Cairns market as a whole 2,600 Trend jobs; which means the 25-45 year age group must have lost some 900 over the year.

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1601215When we consider the gender split in Cairns we see the Male Conus Trend unemployment rate at 6.4% (down from 7.0%) while the Female Conus Trend unemployment rate fell slightly to 7.7% (from 7.8%).

1601216As always, the full spreadsheet of all the Conus Trend data for the Queensland Regions is available for download below. Feel free to use this data, but when doing so please acknowledge Conus where appropriate. The full data set for the Cairns gender series is available on request.
QLD Regions Jobs data – Conus Trend Dec 2015

 

 

Regional unemployment rates improve in North QLD

The release of the regional labour force data from the ABS this morning contains some good Xmas cheer for the North and Far North. As always the original ABS data is unadjusted so we need to focus our attention on the Conus Trend numbers.

In Cairns for November the Trend shows total in employment up by 100 (the first increase in six months) and with a fall in the Trend Participation Rate to 59.1 that results in the Trend unemployment rate drop from 7.8% in Oct (revised down from 8.3%) to 7.4%, which is the lowest rate in Cairns since Sept 2011. Over the course of the past 12 months we see an increase in Trend employment of 1,100, so although the Trend unemployment rate has fallen from 8%, the Employment:Working Population ration remains weak (see the graph below) at 54.7 (which is unchanged from the same time a year ago).

To our south in Townsville there is also good news. The raw ABS data for employment in Nov is so strong that we are very wary of it (employment increased by 4,900 in Nov!). Nevertheless, this jump sees the Trend employment number up by 1,300 for the month with the previous month’s Trend revised strongly up by 1,000. Even with an increase in the Trend Participation Rate to 62.3 (from 61.7), this results in the Trend unemployment rate stable at 7.2%, which in Oct has been revised down from 8.2%. The Employment”Working Population ratio has ticked higher to 58.1 but this remains well below its level a year ago (61.6). Since Nov last year we are still looking at a loss of 5,600 in Trend employment in Townsville. However, this data does suggests a sharp improvement, but given the extreme original data underlying this assessment I will want to see confirmation in coming months before reading too much into this.

As the first graph below makes clear, the differential between the Trend unemployment rates in SEQ and the rest of the state has closed significantly over the past few months.

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When we consider the Cairns data in more detail (and please take extreme care when reading too much into the results of these small data-sets) we see improvements across the board.

Youth Trend unemployment has fallen sharply with the Conus Trend rate down to 13.1% (from a downwardly revised 15.1% in Oct). This is the lowest rate in Trend youth unemployment since Jan 2013. The slow steady improvement in the youth labour market in Cairns appears to still be intact.

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The older (45+ years) cohort of workers in Cairns has also seen some improvement. The Trend unemployment rate has fallen slightly to 6.7% (after Oct was revised slightly higher to 6.9%).

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Considering the gender split we see the Trend unemployment rate for males fall sharply to 7.5% (after Oct was revised down from 9.1% to 8.1%) while the female Trend unemployment rate also dropped to 7.2%, from an unrevised 7.5% last month.

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As always, the full Conus Trend Queensland Regional Labour Market  data is available for free download (below). Please feel at liberty to use this data as you wish, but we would appreciate you acknowledging Conus when doing so.

QLD Regions Jobs data – Conus Trend Nov 2015

This will be my last blog post until Christmas, so would like to take this opportunity to wish all readers a Very Merry Christmas.

Not much joy in regional jobs data although Cairns Youth shows some positives

The release this morning by the ABS of their regional (unadjusted) labour force data for Oct doesn’t appear to change the picture much for the Far North, despite the improvements we saw at national and state level last week (see here for our commentary). As always the raw ABS data is highly volatile so we should focus instead on the Conus Trend series.

The Trend in Cairns shows us that jobs continue to be lost. For the fifth consecutive month Trend Employment has fallen; this month by 400. Over the course of the past 12 months Trend Employment in Cairns has risen by just 500 with most of the gains made in the first quarter of this year having been wiped out. The Trend Participation Rate has also been falling (now at 59.9) and this has been the main reason the Trend Unemployment Rate has actually moved slightly lower, despite weaker jobs growth. The Conus Trend Unemployment Rate is now 8.3% (down from a revised 8.5% in Sept). If we consider the Employment/Working Population measure, which “sees through” the Participation effect, (see the second graph below) we see that the labour market remains weak, just above historical lows.
{For the record the ABS raw data showed employment in Cairns up 2,900 in Oct after a fall of 3,600 last month, and an unemployment rate of 8.7%}

In terms of Trend Unemployment Rates Cairns sits in fourth place amongst the QLD regions behind Queensland Outback (9.9%), and Fitzroy and Wide Bay (both 8.4%).

To our South in Townsville things look even weaker. The Trend Employment numbers show a twelfth consecutive month of declines (this month another 300 lost) with Trend Employment now down by 9,700 over the course of the past year. Trend Participation in Townsville has also fallen sharply (now at 60.9) and this has significantly acted to keep the Trend Unemployment Rate from rising much further. As it stands Trend unemployment is now at 8.2% (up from a revised 8.0% in Sept). Again, the Employment:Working Population measure demonstrates the weakness in the Townsville labour market.

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The gender split in the Cairns region shows Trend Unemployment Rate amongst males at 9.1% (down from 9.5%) while females are at 7.5% (down from 7.6%).

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If there is a positive feature to today’s data for Cairns in comes from an unusual source; Trend Youth Unemployment has fallen sharply. Although we must be very wary of the youth data, coming as it does from such a small data set, today’s numbers seem to suggest that we may have finally turned the corner on what has been a persistent weakness.

The Conus Trend data shows the Youth Unemployment Rate at 17.4% in Oct (down from a revised 19.0% in Sept) which is the lowest since March 2013. The Trend data is indicating that we have been seeing slow, but steady, Trend Employment growth for the past few months (albeit from very low levels) and that this is finally starting to be reflected in a declining Unemployment Rate. It may be too early to get very excited (given the small data set even the Trend series needs to be treated with a great degree of caution) but the graph below shows how the improvement does look to be establishing itself.

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The full set of Conus Trend data for all the Queensland regions is available for free download below. Please feel free to use this data, but if you do so we would appreciate you acknowledging Conus. The Cairns gender Trend data is available on request.

QLD Regions Jobs data – Conus Trend Oct 2015