In recent years, the total number of jobs advertised in Australia has been steadily declining.
Although Australia escaped the worst of the GFC, the number of job ads recently hit their lowest since the initial post-GFC period in early 2009.
The ongoing decline in job ads was no doubt a function of Australia’s slowing economic growth, caused in part by the end of the mining boom.
Significantly, however, there has been a noticeable uptick in the number of jobs advertised over the last two months.
The ANZ Job Advertisements Survey revealed a 1.4% rise in the number of jobs advertised in March, which followed a 4.7% spike in job ads during February.
Below we graph the one-year trend in job ads (white shaded line), overlaid with the NAB Business Confidence Index (green line).
NAB Business Confidence
We can assume that when businesses are confident they are more likely to increase payrolls. As the chart shows, business confidence has been trending higher since about August 2013.
The rebound in confidence is due to a few factors, including the decisive outcome of the Federal election (which removed the uncertainty created by the previously hung parliament).
The stimulatory interest rate environment and healthy consumer spending patterns have also been factors behind the general turnaround in business confidence.
Today, the NAB Business Confidence survey showed business confidence fell to a post-election low. The Business Confidence Index for March fell to +4, from +7 in February and +9 in January.
A key takeout for us, however, was the employment conditions sub-index rebounding from -7 in February to -1 in March, signalling an improvement in the domestic jobs outlook.
ANZ Job Ads
The choppy movement in the Business Confidence Index is an indication of the persistent uncertainty facing companies as Australia’s economy transitions from mining to non-mining led growth.
Nonetheless, we saw some encouraging signs for the jobs market in today’s NAB survey.
We have now seen two consecutive months where job advertisements have increased – the first time this has happened since April 2012.
The trend in the NAB survey’s employment sub-index is a crucial leading indicator of the domestic jobs market.
Although it is likely to be gradual process, an improvement in business hiring intentions suggests further job advertisement growth in 2014, boding well for the overall employment market.