Construction Sector Helps Minimise Expected Unemployment Rise

Tuesday, May 5th, 2015
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Employment is expected to have risen in April, but not enough to avoid an uptick in the unemployment rate.

Official figures to be released on Thursday are expected to show the number of people with jobs rose 10,000 in April, according to an survey of 11 economists. The forecast comes after the economy added a better-than-expected 37,700 jobs in March, more than double the number economists expected at the time.

Economists expect the unemployment rate to tick up to 6.2 per cent for April, from 6.1 per cent in March. Ten of 11 economists surveyed tipped the participation rate to remain at 64.8 per cent.

Commonwealth Bank of Australia economist Gareth Aird predicted modest jobs growth for April to be largely driven by strength in tourism and construction.

“There are a number of job losses coming out of the mining sector, but equally there are plenty of jobs being created in the construction and tourism sectors,” Mr Aird said.

“The lower Australian dollar is helping the economy to rebalance and transition towards non-mining led growth.

“A lift in non-mining business investment is currently the missing ingredient in a return towards trend growth.”

NAB senior economist David de Garis said another surprisingly positive monthly result on the jobs front was unlikely.

“After positive employment surprises, we are alert to the statistical probability or likelihood of some payback in this report,” he said.

“The real surprise would be a higher-than-expected outcome, or even a steady 6.1 per cent unemployment rate, or lower.”

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