Australia: Labour market outlook clearly improving - NAB

The NAB’s latest quarterly business conditions survey points out that the Australian employment index from the Survey has been gradually improving in recent years, and is back to around its post-GFC peak.

Key Quotes

“The index gained ground in Q1 (up 2 to +5 index points), suggesting better rates of employment growth that if sustained should lead to some improvement in the unemployment rate in the near-term. Average hours worked, however, fell slightly in the quarter.”

“Near-term employment expectations were stronger at +11 index points (from +7), which is above its long-run average level. At the same time, longer-term expectations lifted, hitting a multi-year high. Again, that outcomes suggest that the unemployment rate could see a gradually improvement in the longer-term, although NAB’s forecast is for the unemployment rate to remain relatively steady given solid population growth and insufficient job creation (which includes the potential for further job losses coming out of the mining sector).” 

“On a positive note, firms are again suggesting that they have had greater difficulty in finding suitable labour – reflected in a clear trend within the NAB Survey measure since around mid-2015. Given the elevated rate of unemployment, that result suggests that even though the labour market remains fairly loose, there is a lack of workers with the right skills to match employers’ needs.”