Average Incomes rise strongly in Cairns in the year to June 2021

The ABS have just released the June 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. Agriculture) and some seeing declines in hourly rates offsetting hours worked increases (e.g. Arts).  Across all industries average hourly income was down by 4.5% y/y with the average number of hours up 6.1% y/y which results in an average income increase of 1.4% y/y (down from +5.9% y/y last quarter).

The large support payments in place since March 2020 had 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 and we see hours work move higher as people returned to work and support payments (which had distorted hourly rates much higher) fall away.

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

  • Agriculture (added 2.6 ppts): hourly rates +36.9%, hours worked -1.6% = incomes +34.7%
  • Accommodation & Food Services (added 1.1 ppts): hourly rates -28.6%, hours worked +46.6% = incomes +4.7%
  • Education (added 1.0 ppts): hourly rates +3.3%, hours worked +1.5% = incomes +4.9%

At the other end of the spectrum;

  • Arts & Recreation (deducted 1.4 ppts): hourly rates -38.0%, hours worked +25.0% = incomes -22.5%
  • Admin (deducted 1.6 ppts): hourly rates -6.8%, hours worked unch = incomes -6.9%
  • Other Services (deducted 1.3 ppts): hourly rates -24.5%, hours worked +20.0% = incomes -9.5%

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 1.4%, in QLD the rise was more at 2.2%Greater Brisbane saw growth only at 0.7% while the Rest of QLD was much stronger at 3.7%. In our own area Cairns performed well with regional averages (+5.5%); while Townsville was also strong at 4.9%.

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. As we can see, the strong performance from Agriculture, combined with Cairns over-weight representation in this sector, was a major factor in the region’s better performance over the year. Agriculture added 2.6 ppts to growth nationally, 2.5 ppts in Queensland but a massive 5.6 ppts in Cairns.

For some other insights into the data within the Labour Account see Bjorn Jarvis’ excellent thread on Twitter.

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