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Jobs boom starts to show signs of slowing but labour shortages still a challenge

The employment boom may have already passed its peak after the ANZ Jobs Ads index showed a fall of 1.1 per cent in July.

Aug 01, 2022, updated Aug 01, 2022
National unemployment fell to 3.6 per cent

National unemployment fell to 3.6 per cent

But there were still 237,000 job ads in the month indicating there were still a large number of unfilled jobs and the market was likely to continue tightening.

ANZ chief economist Catherine Birch said even if the peak was over, it should not mean unemployment would immediately rise. The bank has retained its forecast of unemployment to fall below 3 per cent.

“There are 480,000 job vacancies across the country, with sharp rises evident in most industries and geographies,” Birch said.

“Consequently, as higher inflation and rising rates curtail demand growth it will take time for the gap between labour demand and supply to close enough to put upward pressure on unemployment,” Birch said.

It came as the Melbourne Institute calculated that inflation rose by more than 1 per cent in July which it said suggested that inflationary pressures would continue in the third quarter.

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It said the inflation was largely due to higher utility and housing-related costs, which included higher rents and construction prices.

Brisbane-based quantity surveyors Mitchell Brandtman’s quarterly cost update showed that project feasibilities were being challenged and projects were being shelved.

Labour was still the biggest challenge for contractors and while residential building activity was starting to ease the market would remain busy for the rest of 2022 and cost escalation was not likely to ease until 2023.

 

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