Cairns unemployment rate falls again but things are not all rosy

Once again we see a drop in the Conus/CBC Staff Selection Trend unemployment rate with the January data showing 5.4%. However, before we get too excited about what appears to be very positive news we should note that the reason for the fall is not improving employment but rather a sharply falling rate of participation.

Trend employment fell again in January and is now down 9,300 over the year. However, while employment has fallen sharply the number counted as unemployed is up just 1,200. Over the course of the year the size of the labour force has shrunk by more than 8,000 and the participation rate has fallen by 5.5 ppts to just 65.7.

The recovery in employment that we are seeing elsewhere across Queensland, where employment growth stands at +1.2% for the year, is not being reflected in Cairns where employment is now down 6.8% for the year.

It is clear that much of the fall in participation is being driven by the middle age cohort where employment has fallen by 9,200 during the year and yet the Trend unemployment rate is up just 0.2 ppts. The middle aged labour force has fallen by almost 10,000 which represents 15.4% during the year. Similarly the youth cohort where, despite employment being unchanged for the year, the unemployment rate is down 7%! There have been a large number (1,600 or 7.6%) of young people also remove themselves from the labour force during 2020. The offset has come to some extent from the older demographic where the labour force is up about 1,000.

Another sign of the struggle that some are having in the Cairns labour market is the fact that the median time looking for a job has ballooned out to 35 weeks and is now the third highest in the State behind the Outback and Wide Bay. A year ago this measure stood at just 6 weeks in Cairns but has increased very sharply since the end of JobKeeper 1.0 at the end of September. 

Much has been made of the imminent end of the JobKeeper scheme at the end of March. Latest data from Treasury suggest that across the Cairns region there were slightly fewer than 17,000 people still on JobKeeper 2.0 in the Sept-Dec quarter. This number is expected to fall somewhat further before the end of March. While this is a significant number it is nowhere near the crazy “one-third of Cairns labour force” which Alan Kohler was inaccurately talking about on the ABC’s The Drum earlier this week (it’s actually closer to 12%). How the end of JobKeeper impacts on the Cairns labour market will depend to a large extent on whether there are any last-minute additional support schemes announced, what happens to the participation rate in coming months, and the ongoing recovery in the nation’s economic fortunes. At this stage our best guess is that we will see an increase in the Trend unemployment rate towards the 8% level in the months after March with a gradual recovery from there. Alan Kohler’s talk of Cairns as a “ghost town after March” are nonsense.

The full Conus/CBC Staff Selection Regional Employment Trend & s.a. data is available for download below. Please feel free to use this data but kindly acknowledge Conus/CBC Staff Selection when you do so.

Conus/CBC Staff Selection Regional Employment Trend & s.a. QLD – Jan 2021


  1. Glen says:

    February 25th, 2021 at 5:40 am

    Great post Pete and people like Alan Kohler should be called out for their unfounded sensations about place they know very little about. I am in Cairns this week, the housing and construction industry and those who supply the industry are very busy and will be for many many months, people like me are coming to Cairns again, staying in hotels, eating in restaurants etc, Cairns will not be a ghost town come April.

  2. Pete Faulkner says:

    February 25th, 2021 at 5:48 am

    Thanks Glen. Yes, there are sectors doing very well and others still struggling but the ridiculous inaccuracy seen on The Drum earlier this week does no one any good.

Leave a Response

  • © Conus Business Consultancy Services 2024

    Website created by RJ New Designs