It’s the Private, not Public, Sector driving Queensland’s better labour market performance

As we noted last week (see here), Queensland’s labour market has been performing relatively well during recent months with total employed up 1.3% in February from a year earlier (while nationwide that figure is unchanged). Inevitably, with the Queensland Government’s own Public Service employment data (data only up to Sept 2020) showing a 2.6% y/y increase there has been plenty of commentary and speculation that the Public Sector (which includes much more than just the State’s own Public Service) was driving Queensland’s performance.

Quarterly data from the ABS for Private and Public Sector employment (to Feb 2021) suggests otherwise. This is a different data-set from the monthly Labour Force numbers so there are some (relatively small) differences; e.g. the quarterly data to Feb suggests a 0.04% y/y growth in total Australian employment rather than the monthly data which showed a 0.01% decline, but the picture painted is broadly the same.

As at February we saw Australia-wide Public Sector employment down 3.1% y/y while Private Sector employment grew by 0.6%. However, in Queensland the equivalent data (when seen through the lens of the Conus Trend series derived from the unadjusted original ABS data) showed Public Sector employment up 0.8% while the Private Sector grew at almost twice that pace, up 1.5%. Worth noting that 85% of total Queensland employment is in the Private Sector.

Indeed since Aug 2019 total employment in Queensland has grown by 3.8% but Public Sector employment is up just 1.5% while the Private Sector has grown at almost three-times that rate +4.3%.

Nevertheless, it is certainly true that Public Sector employment remains at a slightly elevated rate in Queensland compared to Australia, representing 15.0% of total employment compared to 14.5% nationwide. In no small part this is due to some heady gains from 2014 to 2018 in Queensland.

Compared to the other large states Queensland’s growth in the Public Sector has been relatively muted in recent years with both NSW and Victoria seeing faster growth than the Sunshine State, where Public Sector employment had been falling year-on-year for the previous 5 quarters before this latest increase. We shall have to see if some restraint with regard to public sector employment can be adhered to in coming quarters.

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