Key Points
- Australian job postings surged higher in October, following three consecutive monthly declines.
- Annual wage growth exceeded 3.0% for the first time in almost a decade, driven by tighter labour market conditions and a 5.2% increase in the minimum wage.
- Unfortunately those gains were overshadowed by Australia’s cost-of-living crisis. Inflation-adjusted wages have fallen 3.9% over the past year, leaving wages at their lowest level in 11 years.
This month’s labour market update focuses on the ongoing strength in Australian job postings and recent developments in wage growth.
Australian job postings break higher
While concerns around high inflation and rising interest rates continue to build, the demand for workers remains incredibly high and actually increased further throughout October. That suggests that Australian employers are still optimistic about economic conditions and the outlook for their respective businesses.
By the end of October, job postings on Indeed were tracking 141% ahead of their level on February 1, 2020, our pre-pandemic baseline, after adjusting for seasonal trends. The number of job postings rose 8.2% in October, following three consecutive monthly falls from July to September. It was the largest monthly gain since February.
Australian job postings remain high by international standards, with growth well above the US, UK and Canada. While recruitment has been strong in each of these countries, Australia has consistently outperformed with our recovery beginning earlier and remaining stronger despite repeated COVID-19 lockdowns.
Posting growth in October was broad-based across states, led by South Australia and Victoria where postings rose by 12% and 11.5%, respectively. While postings in New South Wales rose by a more modest 6.6% in October, the state made the second largest contribution to national growth behind Victoria.
Postings rise strongly across a range of occupations
Over the past three months, job postings have grown strongly in occupations such as dental (+51%), social science (37%), childcare (37%), education (+29%) and physicians & surgeons (28%).
While postings for most occupations have increased over the past three months, there have been a handful of sizable declines. None have been larger than the 16.4% fall in job postings for nurses. Postings have also fallen considerably for medical information (-13.9%), real estate (-7.5%) and cleaning & sanitation (-7.5%).
It is, however, important to remember that while postings have fallen recently for some occupations, they have typically done so from a very high level. For example, while postings for nurses have fallen 16.4% over the past three months, there are still 123% more postings than there were before the pandemic began.
Inflation-adjusted wages are at their lowest level since 2011
Australian wages rose by 3.1% over the past year — the strongest outcome since March 2013. A combination of tighter labour market conditions and a 5.2% increase in the minimum wage has contributed to the recent pick-up in wage growth.
Stronger wage growth would normally be a cause for celebration but it comes with an important caveat: inflation is running at 7.3%.
Australia’s cost-of-living crisis has washed away more than a decade of hard fought wage gains, leaving Australian households considerably worse off. Inflation-adjusted wages have tumbled 3.9% over the past year and are currently at their lowest level in 11-years. They are expected to fall further next year, based on the Reserve Bank of Australia’s latest forecasts.
Australian wage growth is expected to rise further in the near-term, supported by an historically tight labour market and further flow through of the minimum wage decision. In the September quarter, wages changed in 46% of Australian private sector jobs and the average increase across those jobs was 4.3%. If gains are similar over the next six months – during which wages for around a third of jobs will change – then annual private sector wage growth could reach 4%, from their current level of 3.4%, for the first time since the global financial crisis began.
Australia’s labour market remained healthy throughout October, with the unemployment rate falling to a fresh 48-year low. Employment gains though are proving more difficult to achieve, with employment growth slowing considerably since mid-year. Recruitment is challenging, with the demand for workers continuing to outstrip the availability of candidates.
Rising wages is a consequence of the heightened demand for workers but unfortunately most Australians haven’t had an opportunity to take advantage of a higher wage. Unless you’ve received a promotion or changed employer recently, there is a good chance that your salary buys a lot less this year than it did last year and every year in the decade that preceded it.
Methodology
All posting figures in this blog post are derived from seasonally adjusted job postings. We seasonally adjust each series based on historical patterns in 2017, 2018 and 2019. Each series, including the national trend, occupational sectors and sub-national geographics is seasonally adjusted separately. We adopted this methodology in January 2021.
The national and regional analysis is based on the percentage change in job postings on Indeed’s Australia site since February 1, 2020, our pre-pandemic baseline.
The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit’s HR Technology segment.
The data from the Australian Bureau of Statistics comes from the Wage Price Index.
