Sign of solid jobs growth for rest of 2018

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)


Employment growth unsurprisingly cooled after an unsustainable record run in 2017, but there are signs job gains are likely to be solid for the remainder of this year.

A trio of surveys released on Tuesday show businesses remain fairly upbeat about the economic outlook which should translate into the hiring of more staff.

The latest Westpac-Australian Chamber of Commerce and Industry industrial trends survey shows the loss of momentum in the manufacturing sector at the turn of the year was temporary.

In the June quarter report, manufacturing activity was buoyed by road building and other infrastructure projects by state governments.

Government investment spending was a key factor in last week’s national accounts in lifting annual economic growth to its strongest in almost two years.

“Manufacturing is on the right side of the growth story,” Westpac senior economist Andrew Hanlan told reporters in Canberra.

“It suggests to us that jobs growth, that cooled a little bit at the start of the year, will be solid over the remainder of 2018.”

The broader monthly National Australia Bank business survey showed while conditions eased from record highs, they remain above average.

“Both business conditions and leading indicators continue to suggest a pick up in economic growth and that, over time, jobs growth should see the unemployment rate fall towards five per cent,” NAB chief economist Alan Oster said.

These results come ahead of Thursday’s official labour force figures for May.

Economists expect around 20,000 people found employment in May after a 22,600 increase in the previous month.

The unemployment rate is expected to remain at 5.6 per cent.

This follows a fairly patchy start to the year, which included two months of small employment declines, after the record of more than 400,000 jobs secured over 2017.

A third survey signalled more employers expect to increase their staffing levels in the coming months than not.

The ManpowerGroup employment outlook survey for the September quarter found upbeat hiring intentions across the economy.

“Rather than employment growth being dependent on one sector, such as during the mining boom, we are now seeing a sustained positive outlook across all sectors,” ManpowerGroup Australia and New Zealand managing director Richard Fischer said.

However, the Australian Chamber’s chief executive James Pearson noted cost pressures are building for businesses and again called for “real action” on energy costs.

He also urged the federal parliament to get behind the Turnbull government when it sits over the next two weeks and pass the remainder of its business tax cut plan.

“It will encourage greater investment and put Australian firms in a more competitive position,” he told reporters.


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