March Labour Account shows average income growth slowing as labour market supports ease

Posted on June 9, 2021 by Pete Faulkner - Cairns, Jobs, QLD, Townsville, Uncategorized

The ABS have just released the March 2021 quarter Labour Account data series which 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 data provides us, for each industry type, 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.

There are marked differences between sectors with some seeing massive hourly rate increases driving extremely healthy income rises (e.g. Education and Rental) and some seeing declines in hours worked offsetting hourly rate increases (e.g. Other Services); most have seen a solid increase in average incomes with only Admin Services (-1.7%), Healthcare (-0.6%) and Information & Media (unch) not seeing increases . Across all industries average hourly income rose by 4.8% with the average number of hours up just 0.8% which results in an average income increase of 5.6% (down from +5.7% last quarter).

The large support payments (JobKeeper and JobSeeker) in place since March 2020 have clearly distorted this data during the past 12 months. However, as these supports have been removed and the labour market has started to move to a more ‘normal’ position we have seen the scale of that distortion ease.

Those sectors that contributed the most to the rise in average incomes were;

Education (added 1.1 ppts): hourly rates +13.7%, hours worked -0.2% = incomes +13.4%
Construction (added 0.8 ppts): hourly rates +9.3%, hours worked -1.3% = incomes +7.9%
Transport (added 0.6 ppts): hourly rates +13.3%, hours worked -2.2% = incomes +10.8%

At the other end of the spectrum;

Admin Services (deducted 0.2 ppts): hourly rates -0.6%, hours worked -1.2% = incomes -1.7%
Healthcare (deducted 0.1 ppts): hourly rates -0.5%, hours worked -0.1% = incomes -0.6%
Information & Media (0 ppts): hourly rates -2.7%, hours worked +2.7% = incomes unchanged

By combining the Labour Account data with our own Conus Regional Industry Employment Trend data we can estimate the average income changes across QLD’s regions. These estimates assume that industry sector changes are equal across the nation; differences in regions are therefore driven by the varying industry sector make-up of their employment environment.

While nationwide average incomes were up 5.6%, in QLD the rise was a little more at 6.0%. Greater Brisbane saw better growth at 6.1% while the Rest of QLD was weaker at 5.8%. In our own area Cairns performed in line with regional averages (+5.8%); while Townsville lagged slightly at 5.5%.

The chart below shows how different sectors contributed to average income changes across Australia, Queensland and Cairns due to the differing industry sector make-up of the regions’ employment.