AUSTRALIA’S unemployment rate continues to “defy the odds” by remaining steady at at 5.8 per cent in July, an economist says.

The seasonally adjusted unemployment rate was unchanged from June, Australian Bureau of Statistics figures out today show.

“The Australian labour market continues to defy the odds,” ANZ economist Riki Polygenis said.

“It suggests that we’re not going to get to an unemployment rate of 8.5 per cent like the Government’s latest forecast.”

The ABS data also show that total employment rose by 32,200 to 10.794 million, in July, seasonally adjusted.

Full-time employment decreased by 16,000 to 7.6 million and part-time employment increased by 48,200 to 3.2 million.

The number of people looking for full-time work decreased by 4800 to 495,900 and the number of people looking for part-time work increased by 5600 to 168,200, the ABS said.

“Part of the reason that employment is not falling in Australia is we’re seeing this shift away from full-time to part-time employment,” Ms Polygenis said.

Let’s just all ignore foreign debt, which both parties have overseen in record numbers

“Employers are choosing to cut back on employment hours rather than cut back on their head count over all to cut costs.

“That being said, the pace of decline in full time employment appears to have eased.”

But Ms Polygenis said the rise in part-time work could mask the impact of changing labour market conditions.

“It is to a degree,” she said.

“If people are losing work hours then that does negatively impact on household income.

“But at the same time household income is not going to be as great as it would be if people were losing their jobs altogether.”

Kinetic Securities chief economist Clifford Bennett said the July data were relatively positive.

“While the unemployment situation has deteriorated this is still an excellent outcome, confirming our long forecast resilience of the Australian economy to the global slow-down,” he said in a note.

“The decline in full-time employment was modest at 16,000, and was more than offset by the rise in part time employment of 48,200.”

Other surveys show the drop in the number of job ads is slowing

ANZ released its own monthly survey on Monday revealing internet and newspapers job ads fell by 1.7 per cent in July – taking the annual fall in job ads to 51.9 per cent.

July was the fifth consecutive drop in job ads but showed a slowing in the rate of decline after June saw job ads fell by 6.7 per cent.

The Olivier Job Index was also released this week showing a fall of just 0.41 in July job ads, compared to 0.85 per cent in June with recruitment expert Bob Olivier declaring unemployment had turned a corner towards recovery.

Technology was the best performer of the 17 sectors surveyed. In June, technology vacancies were down 1.91 per cent but in July job ads for tech candidates were up 8.38 per cent.
Contract work making a comeback

IT specialist Peoplebank’s quarterly IT&T salary index showed the number of contractors hired in June rose 5 per cent rise over the previous quarter.

A significant rise in permanent IT jobs was not expected for six to nine months.

According to the Olivier Index casual, vacation, part-time and temporary job ads across all categories increased in July.

The trend toward an increase in temp and causal jobs was confirmed by other major recruiters including Robert Half Finance & Accounting, Randstad and Michael Page Australia.

“Contract is king,” explained John Leith, managing director of recruitment consultants 2Discover.

“(Employers) cleared out a lot of staff for whatever reason, and now we’re in a new financial year there would be more budget to bring back workers,” he said.

Infrastructure spending was also expected to boost future employment.

Infrastructure recruiter Michael Champion of Fusionpeople said road, rail and water projects showed particular promise for generating jobs.

“Water is very busy, particularly in Victoria with the awarding of the ($3.5billion) desalination plant there, which will generate a lot of work for the next two or three years,” he said.

The plant has been described as the world’s largest public-private partnership since the global financial crisis began.

“Sydney has been busy for roads and highway work – mainly in Northern NSW from the Hunter and up,” Mr Champion said.

“There is also still plenty of activity going on in rail with a range of feasibility studies related to the proposed metro link rail projects. When that breaks it will be the biggest rail project to hit Sydney since the Epping-Chatswood project.

Last month also saw Access Economics revise its unemployment projections for 2010 from a high of 8.5 per cent to 7.5 per cent, a prediction echoed by ANZ.

Kate Southam is the editor of CareerOne

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