Income growth in Regional Queensland underperforming Greater Brisbane

Today’s release of the June 2019 Labour Account data series provides a wealth of information. One thing it allows us to do is take a  look at incomes across various industry sectors and how they have changed in the past 12 months. The table below shows, for selected industries, the year-on-year changes in the average hourly income per employed person, the average number of hours actually worked per employed person, and the resultant average income per employed person.

Industry Avg Hourly Income
% y/y
Avg Hours Worked
% y/y
Avg Income
% y/y
Retail 1.7 -0.4 1.3
Public Admin 3.2 -0.9 2.2
Healthcare 3.9 -0.4 3.5
Construction -3.3 0.3 -3.0
Education -0.9 -0.7 -1.6
Accomm & Food 3.8 0.3 4.2
Manufacturing -0.3 1.2 0.9
Mining -0.8 -2.7 -3.5
ALL 1.7 -0.1 1.6

Across all industries average hourly income rose by 1.7% but the average number of hours fell 0.1% resulting in an increase in average income of just 1.6% (well below inflation).

Many industry sectors saw average hours worked fall, although the strength of the tourism sector would appear to be playing out with solid rises in both average hourly income and hours worked resulting in a 4.2% increase in average incomes for the Accommodation & Food Sector. The much discussed slow-down in the Construction sector would appear to be reflected in a decline in hourly rates, although hours worked saw a reasonable increase resulting in a 3.0% drop in average incomes in the sector. This is the fifth quarter of y/y declines in average incomes in this sector.

Only seven out of the nineteen sectors saw average incomes rise by more than 3% with almost as many (six sectors) experiencing income falls. It’s litte wonder that household consumption growth (and therefore GDP growth) is proving so lack-lustre,

The breakdown of industry average incomes, combined with total numbers employed in each industry sector, allow us to analysis the industry sectors’ contribution to total average income growth. Major positive contributions to total average income growth came from Administrative Services (which added 0.7 ppts on the back of a 12.1% y/y increase in incomes) and Healthcare (which added 0.5 ppts with average incomes up 3.5% y/y). Construction deducted 0.2 ppts while Other Services saw incomes drop 9.2% and therefore deducted 0.4 ppts from total average income growth.

By using industry employment data from the Conus Industry Employment Trend for the Queensland regions and calculating the relative size of industry employment across sectors and regions, we can estimate the industry sector impact on income changes at a regional level to provide a measure of total average income growth for each SA4. What this analysis shows us is that average incomes in Queensland are estimated to have increased at 1.3% (slower than the national average) with Greater Brisbane at 1.8% and the Rest of Queensland at just 0.8%. All regions outisde SEQ saw average incomes rise much slower than inflation with only the Gold Coast coming close to the pace seen in Greater Brisbane.

Average Income y/y Jun 2019
Australia 1.6
Queensland 1.3
Greater Brisbane 1.8
 Brisbane – East 1.5
 Brisbane – North 2.2
 Brisbane – South 2.1
 Brisbane – West 1.6
Brisbane – Inner City 2.1
 Ipswich 1.6
Logan – Beaudesert 1.4
 Moreton Bay – North 1.4
Moreton Bay – South 2.0
Rest of Qld    0.8
 Cairns 0.9
 Darling Downs – Maranoa -0.9
 Fitzroy -0.6
 Gold Coast 1.8
 Mackay 0.4
 Qld – Outback -2.5
 Sunshine Coast 1.1
 Toowoomba 1.0
 Townsville 1.2
 Wide Bay 1.0

This data also shows us the pace of average income growth in Greater Brisbane has been accelerating (albeit very slowly) for the past 2 quarters while in the Rest of Queensland the growth rate has been slowing for 5 quarters. There is a substantial gap opening between the two areas.

{The Labour Account average income data is for quarters ending in March, June, Sept and Dec whereas the Labour Force Detailed Quarterly is for quarters ending in Feb, May, Aug and Nov. Nevertheless, the difference in relative employment representation (particularly when seen on a Trend basis) is likely to be minimal. 
Actual income data at the regional level is not available. Therefore, the derived changes assume that income changes across industry sectors are common across regions. Differences across regions in average incomes are due to variations in the industry make-up of the employment in those regions.}

The Labour Account also provides us with data on the number of Main and Secondary jobs in the economy. Back in the December quarter the initial seasonally adjusted estimate of Secondary Jobs ticked above 1 million for the first time. However, since then we have seen a slight decline in this number and it currently sits at 940,900. Secondary jobs now account for 6.6% of all jobs (lowest level since Dec 2017) and have grown just 0.7% y/y while Main jobs are up 2.6% y/y.

Further details on the regional income data by industry is available by contacting Pete.

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