Australia | Mar 10 2009
By Chris Shaw
In 2008 inflation was seen as the big issue confronting the Australian economy, but 2009 is shaping up as the year of unemployment if the latest ANZ job ad numbers are any guide.
February data showed a sharp fall of 10.4% in the total number of jobs being advertised, taking the annual fall to 39.8%. Both newspaper and internet ads were significantly lower, with the data worst for newspapers as February job ads in this medium declined a massive 25.2% against a 9.4% fall in internet ads.
ANZ Banking Group head of Australian economics Warren Hogan notes this fall in newspaper ads more than undid the 12.3% increase in January and the total is now down 55.4% for the year. In comparison the fall in internet ads leaves this measure 38.6% lower than was the case a year ago.
Hogan also pointed out the February fall was the largest in the history of the series, which extends back to 1999, while the rate of decline in annual terms is also a record and suggests the demand for new labour across Australia is continuing to contract.
As Hogan notes, this implies a significant increase in unemployment in coming months, the bank revising up its forecasts to reflect this expectation. Hogan is now forecasting the unemployment rate will hit 6.5% by the end of this year and 7.5% by the middle of next year, with risk seen as to the upside.
With employment contracting at an annualised pace of around 2% based on today’s job ad numbers, Hogan sees the current contraction in the Australian economy continuing through 2009, with little prospect of any meaningful recovery prior to 2010 in his view.