Vacancies surge to soften JobKeeper demise

·3-min read

At a time when tens of thousands of people may be worrying about their futures following the end key government support measures this week, there was at least some positive news for those left seeking a job.

Australian Bureau of Statistics figures show that between November 2020 and February 2021 there was a 13.7 per cent increase in job vacancies - 27 per cent higher than a year earlier and prior to the start of the COVID-19 pandemic.

"Even with the faster-than-expected fall in the unemployment rate so far, the elevated level of vacancies points to further declines," National Australia Bank economist Taylor Nugent said.

"Elevated job vacancies also reduces the risk of unemployment increasing substantially following the end of JobKeeper."

Unemployment dropped to 5.8 per cent in February, more than a year ahead of official forecasts.

But Treasury estimates up to 150,000 people could be out of work as a result of the JobKeeper wage subsidy ending this week.

The JobSeeker coronavirus supplement also ended on Wednesday, although the base of the dole rate was slightly lifted.

ABS head of labour market statistics Bjorn Jarvis said there were 289,000 job vacancies in February - 61,000 more than a year earlier.

"This reflected the pace of recovery in labour demand over the second half of 2020 and early 2021, and labour shortages in some industries," he said.

In other data released on Thursday, retail spending declined 0.8 per cent in February, a slightly smaller fall than had been estimated in preliminary figures released last month.

However, retail trade was still a solid 9.1 per cent higher than a year earlier.

"While we don't expect a 'fiscal cliff' with the removal of JobKeeper, we do expect sales to soften in the coming months," Australian Retailers Association CEO Paul Zahra said.

"Some businesses are unfortunately in the process of letting people go which will impact broader consumer spending, as will the reduced JobSeeker payments."

One area where employment growth has surged is among manufacturers, where confidence has been boosted by buoyant levels of new orders.

"The challenge over the next couple of months will be to maintain momentum as fiscal support is wound back further and while COVID-19 remains a threat," Australian Industry Group chief executive Innes Willox said.

The Ai Group's performance of manufacturing index rose by a further 1.1 points to 59.9 on Thursday, its highest level since March 2018.

It was the index's sixth consecutive rise and showed the industry was comfortably in expansion territory.

Mr Willox said manufacturing grew across the full range of sectors.

The ABS also reported an international trade surplus of $7.5 billion in February, declining from the record $9.6 billion surplus in January.

Exports declined one per cent in the month.

Metal ore exports fell from January's record high, despite ongoing strength in prices, but this was partly offset by a rise in rural goods exports, led by cereals which have surged due to improved seasonal conditions.

Imports rose by five per cent in February.

"The uptrend in imports is in response to brisk domestic demand with the economy reopening and benefiting from the strong tailwind associated with substantial policy stimulus," Westpac senior economist Andrew Hanlan said.