Hiring freeze continues. Inflation disappears. Record engineering work. Petrol to fall

The gloom on the job market could very well prove to overdone. While businesses cut back on hiring in recent months, the green shoots of economic recovery again appear to be appearing. Equity and commodity prices have risen sharply in recent weeks, while the global barometer – the Australian dollar – has lifted almost US10 cents from recent lows. The Australian economy was never fundamentally in bad shape to begin with, merely succumbing to a crisis of confidence from the global gloom.
submitting resumes directly to agencies, saving businesses time and money in recruiting staff.

Craig James, Chief Equities Economist, CommSec, April 2009

Beleaguered tourist operators have reason to smile. Tourist arrivals soared by almost six per cent in February at a time when economic gloom was permeating many parts of the globe. Not only did the number of overseas visitors to Australia soar in the past month, the actual number was the highest in 13 months. Even in times of global economic downturn there are opportunities for businesses. The smart businesses will look to take advantage of the opportunities rather than fret about the risks.

A quick glance at the newspapers would give the impression that the economy has ground to a halt. That’s far from the case. Engineering construction hit fresh record highs at the end of last year. And while work for the private sector eased from record highs, outstanding work is still up almost seven per cent on a year ago.

There is good news for motorists. The wholesale petrol price is again falling after lifting almost 5 cents a litre in the space of a fortnight. The bottom line is that the recent broad range for pump prices of $1.05 to $1.25 a litre is likely to hold. By using shopper dockets and buying on the cheap days of the week, many capital city motorists will be filling up for around $1.00 a litre.

Another way of assessing the state of the job market is to assess the demand for temporary 457 work visas. In the eight months to February 2009, applications for 457 visas were up 8.7 per cent on a year ago. While higher than a year ago, demand for staff has eased. In the last two months, visa applications totalled 9290, down from 9980 applications a year ago. If the job market had truly ground to a halt, you would expect that one of the first places this would show up is in terms of demand for foreign workers.

The other important point to consider with job ads is the prevalence of double or even triple counting. It is almost impossible to account for the fact that employers advertise on numerous sites. When the job market is strong, the data on advertisements overstates the true strength of the market. And when employers stop hiring the drop in ads overstates the true level of the weakness.

The fall in job advertisements likely overstates the true state of the job market. While employers are certainly advertising less for staff, a key reason is because they don’t need to. Rather, potential employees are

Job advertisements are now down at four-year lows. Still it must be remembered that four years ago the jobless rate stood at 5.1 per cent – in other words, similar levels to today. The 40 per cent lift in job ads over 2007 was symptomatic of excess demand for labour. The near 40 per cent fall in job ads has merely restored the job market to more balanced conditions.