As 2016 draws to a close, Australia’s jobs data continues to offer no real indication of any strength in the Australian economy.

The official unemployment rate for November – and the last data to be released in 2016 – saw the unemployment rate tick up to 5.7 per cent for the month, a result that took most analysts by surprise based on predictions it would remain stable.

Full-time jobs increased by 39,300, while there was a decline in part-time jobs of 200. However despite this seemingly good result in full-time job growth, more job seekers entered in to the job market, with the overall participation rate (the number of people available for work and actively seeking work) rising from 64.4 to 64.6 per cent, leading to the rise in the unemployment rate.

It will also be interesting to watch the potential further impact on this participation rate and therefore the unemployment rate in the coming months, if jobs growth does not keep pace as this year’s graduates and school leavers begin to enter the job market for the first time.

Across the states, South Australia and Western Australia recorded the country’s highest unemployment rates at seven per cent and 6.9 per cent respectively. In Victoria and Queensland the unemployment rate rose to six per cent, but like the national figures, these rises were due mainly to changes in the participation rate (with the exception of WA which is still losing jobs.)

In NSW, the unemployment rate remained steady at 4.9 per cent, and recent infrastructure investment announcements including the new Badgerys Creek airport announcement will increase further demand for workers in a market where demand is already outstripping supply. ACT and the Northern Territory recorded the lowest unemployment rates in the country at 3.7 per cent.

Since the monthly fluctuations in the job rate that we have seen throughout 2016 give us little good data on which we can make predictions for the construction job market in 2017, let’s look at what are likely to be the most in demand jobs in the construction and building sector in the coming year.

Skilled trades are at the top of the list with demand for electricians, carpenters, bricklayers and plumbers as well as other specialist trades high across all states. Regardless of whether the outlook for the building and construction industry is positive or negative in 2017, the level of existing work and projects in the early stages of implementation will continue to fuel demand for building and construction trades. Add to this the aging nature of Australia’s workforce and the high level of apprenticeship “drop outs” in the sector, and it is hard to see a time when skilled trades will not be in demand in the future.

Plant and machine operators are also likely to see continuing demand based on the same factors impacting skilled trades. In addition, we have seen a recent rise in Australian commodity prices. If this continues in 2017 as predicted, we are likely to see some workforce demand coming back from the resources sector, and whilst it is likely that workers will be a little cautious about pursuing opportunities in the resources sector initially, if demand continues then there is no doubt it will place a competing demand for talent on the construction sector

Demand for experienced contract managers and project managers is also likely to remain high, again mainly due to the number of current projects and the number of committed contracts in the pipeline. However, this demand could also quickly change and these two roles are likely to be “canary in the mine” indicators. Increases or reductions in demand for the roles could provide a guide to the strength of the building and construction job market should any instability in the economy in 2017 put a scare through investments in the sector.

The job market in 2016 can be most characterised by uncertainty with the monthly fluctuation that we see in full-time and part-time jobs numbers set to continue throughout 2017. And in the absence of any strong economic indicators that the Australian economy is starting to build momentum, it is hard to provide any long-term predictions.

What we do know is that the impact on jobs and the Australian economy of any downturn in construction would be significant given the number of people that are employed across the sector. Therefore, government would likely initiate investment stimuli in this area should the need arise, which might serve as some small comfort for those worried about the prospects for their jobs in 2017.

  • I still fail to understand this "bubble" mentality. Year on year Australia's population increases by circa 400,000. And Australia still has the worlds third lowest population density (source OECD) – 1 person per 3 square KM's (same as Greenland). We have significant room for growth, both in terms of land mass available (and yes I believe 60% can still be utilised, just like the Arab countries do), and the fact we are still such a young country. Realistically Australia in 2016 could easily accommodate more than 40 million people without much effort, let alone once all our major infrastructure in our capital cities are completed in the next 15 years. So….getting back to my main point. And that is, that with 4000,000 annual population increase, there should be no reason in the slightest that we are in a bubble, as we have sustained and substantial growth to afford the continued construction activity for today and for many decades to come. Glass is half full in my view.

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