16/03/2017 - 10:51

Better news on unemployment for WA

16/03/2017 - 10:51

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The unemployment rate dropped 0.4 percentage points in Western Australia in February, to 6 per cent in seasonally adjusted terms, as the state jumped from last place on that metric to be better than Victoria, South Australia and Queensland.

Better news on unemployment for WA
Economic data shows things are getting moving again in WA. Photo: Attila Csaszar

The unemployment rate dropped 0.4 percentage points in Western Australia in February, to 6 per cent in seasonally adjusted terms, as the state jumped from last place on that metric to be better than Victoria, South Australia and Queensland.

It is the best result for WA in the Australian Bureau of Statistics’ monthly data since June of 2016, and considerably down from a peak of 6.9 per cent in November.

But the reduction was largely driven by a fall in the participation rate, which measures the number of adults either in work or looking for work, from 67.8 per cent to 67.2 per cent, or about 11,000 fewer people.

It follows a run of improved economic data for WA in recent weeks, including the first quarter of growth in state final demand, which measures production in the economy excluding exports, in more than a year.

Nationally, unemployment lifted slightly from 5.7 per cent to 5.9 per cent, with Queensland faring worst, up 0.4 percentage points to 6.7 per cent.

St George Bank senior economist Janu Chan said jobs nationally had unexpectedly contracted in February, after a string of reasonably healthy gains in 2016.

“It will become clearer in coming months whether today’s data should be dismissed as some temporary weakness or signalling a further loss of momentum in the jobs market,” Ms Chan said.

“Other economic indicators have also been sending mixed signals.

“Nonetheless, above-average business conditions and ongoing growth in job ads suggest that the economy has enough strength to post job gains at a pace sufficient to keep the unemployment rate broadly steady.”

Commsec chief economist Craig James said the softer data does not line up with other evidence.

“There have been healthy business surveys in recent months with the NAB business conditions index hitting 9-year highs in January,” Mr James said.

“Mining prices have lifted, the agricultural sector is buoyant, tourist arrivals are at record highs and more homes are being built than ever before.

“Certainly leading indicators like job ads are pointing higher rather than lower.

“And low real unit labour costs give employers plenty of reasons to be taking on staff.

“Investors are best advised to move on and focus on the next major economic data which is retail trade, released on April 3."

Research released today by recruitment company Manpower also signalled an improvement for WA.

The company surveys businesses quarterly to ask whether they anticipate employment conditions to improve in the coming quarter (June) compared to the current quarter.

The report said the coming quarter would be the strongest labour market the state has had in two years, with a net outlook (the percentage of businesses anticipating employment will increase minus the percentage predicting a decrease) of 6 per cent.

That was up 21 per cent on the same quarter last year.

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