WA employer confidence softens

Employer confidence in Western Australia has weakened, despite a continuing strong economy underpinned by the resources boom in the state’s north-west, according to a recent employer confidence survey.The Hudson Report, a quarterly employer expectations survey from global human resource consulting firm Hudson, reports that employers in WA are no longer the most confident in the country.The assertion, in the report for the first quarter of 2006, is based on the survey’s measurement of employer confidence, which indicates employer confidence in WA has slipped by 2.3 percentage points since the previous quarter.This result is set against a national average of a decline of 1.5 percentage points over the previous quarter. Based on the same measure of assessment only New South Wales recorded a worse result – a 2.5 percentage point decline in employer confidence on the previous quarter.However, the results are not all bad, and the figures may to some degree mask the ongoing stand-out performance of the WA economy.The report was compiled from a survey of 8,693 employers nationally across 18 core industry groups aligned with the Australian Bureau of Statistics industry classifications.The survey showed 43.2 per cent of WA employers expect to increase permanent employment numbers in their business in the opening quarter of 2006, while only 5.5 per cent of employers plan to reduce staff numbers.This produced a ‘net effect’ result of 37.7 per cent for WA, making it second only to Queensland in state-by-state analysis of employment expectations, and well ahead of the national average of 30.5 per cent.The ‘net effect’ figure is calculated by taking the percentage of employers surveyed that expect to increase staff levels during the quarter and subtracting the percentage of employers that expect to decrease staff levels.An industry-by-industry analysis identifies a weaker outlook for job growth in the financial services and insurance sector as a contributing factor to the decline in employer confidence in the state over the previous quarter’s result.WA continues to ride the resources boom, with 66.7 per cent of employers in the sector planning to hire more permanent staff and only 2.8 per cent planning to cut staff numbers. Plans by mining heavyweights BHP Billiton and Rio Tinto to expand operations in the Pilbara region, and the resultant flow-on effects throughout the supply chain, suggest the robust jobs outlook for the sector is likely to continue.This is reinforced by the survey, which shows that the construct-ion/property/engineering sector enjoyed an 8.1 percentage point rise in employer confidence.The professional services sector is also experiencing a strong outlook, with a net 58.3 per cent of employers indicating they will increase permanent employment levels.According to Hudson’s general manager in WA, Neville Andrews, the historically low levels of unemployment in the state and a shortage in candidates is putting significant upward pressure on labour costs. “This means that employers need to find new ways of sourcing candidates. Many companies have increased their apprenticeship programs and graduate intakes to address the shortage, and some are even sourcing candidates from offshore,” Mr Andrews said.The surveyed also showed that national employment expectations have declined for the second consecutive quarter for the first time in more than two years, indicating a further softening of the Australian job market after a long period of booming employment conditions.