With the federal election now a fading memory and words like Brexit turning to Regrexit, the question on everyone's minds is "what does all this mean for the Australian job market?"
More specifically, what does it mean for the jobs in the Australian construction sector, which has in the last few years been one of the few jobs bright spots and a key driver of jobs growth in the Australian economy.
Last week, we saw the Australian Unemployment rate for June rise to 5.8 per cent. It’s the first time we have seen a rise in four months and comes largely on the back of an increase in the overall participation rate (the number of people available for work). We also saw the number of full-time jobs increase by 38,000 and a decline in part-time jobs, which many optimists seized on as a sign of underlying jobs improvement, given that recent jobs growth in Australia had been predominantly in part-time roles.
How much did these political events impact the Australian Job market? I think it is too early to tell, given the results were either not yet determined, or so late in the month and unexpected, that they are unlikely to have influenced employer thinking here too much in June. We also cannot read too much in to a single monthly rise in full-time employment given the questionable methodology the ABS uses to define the difference between genuine full-time and part-time work.
However, what is certain is that these political events are likely to cause some hiring reflection and most likely create some uncertainty for Australian organisations in the near future. This means we will likely continue to see the kind of volatility in the Australian unemployment rate that we have become accustomed to in the last few years persist for many more months to come.
With the Australian construction sector one of Australia’s largest employer groups, it will be vital for jobs and the economy that the government gets on with its election commitments to continue to invest in infrastructure, particularly as many of these new commitments have not yet been fully vetted by Infrastructure Australia, the very organization that was set up to ensure the quality of proposed government investments.
According to the Gratton Institute, analysis on election infrastructure spending commitments by the three major parties shows that the highest commitments to state infrastructure spending seem to follow the highest levels of unemployment. Queensland is likely to receive the highest investment, followed by Victoria. South Australia is the exception, where limited infrastructure investment promises are likely to do little to help a state with the highest unemployment rate in the country at seven per cent.
Over the last few months, we have seen a slight easing of demand for roles in the construction sector, and whether is a short-term issue or a longer-term trend still remains to be seen. Forecasting future employment in Australia has become somewhat of a lottery over the last few years, and with recent political events here and overseas ensuring an economic cloud continues to hover over Australia, we are unlikely to see much change in the next year.
What is certain is that the construction sector will continue to be a key to jobs growth in all sectors, and whilst we can not control what happens overseas, we can control what happens locally. Federal and state governments need to work together to ensure that investment in new infrastructure development moves quickly to ensure not only jobs growth but job retention across the sector.