SA Data wrap - employment growth remains stagnant
In the first Data Wrap of 2019, we review yesterday’s Labour Force Survey figures and consider leading indicators of residential construction activity for South Australia.
Unemployment rate edges higher as employment levels remain flat
Jobs growth in South Australia stalled in the second half of 2018 and latest Labour Force Survey estimates from the ABS show no material change in this trend. The total level of employment in December 2018 (843,500 persons) was unchanged from 6 months earlier. But total employment was still 1.2 per cent higher compared to a year earlier, and the substantial recovery in labour market conditions that has occurred since late 2015 has been largely preserved.
The South Australian trend unemployment rate was 5.8 per cent in December, up slightly from November but down from 6.0 per cent a year earlier. The recent uptick in the unemployment rate is due to the lack of employment growth; the trend participation rate has remained steady at 62.6 per cent over recent months.
Although overall employment levels have failed to grow over the last 6 months, there has been a welcome resumption in full-time employment growth. Total full-time employment rose by 1.1 per cent (5,900 persons) over the 6 months to December.
With total employment flat-lining over recent months the unemployment rate differential between South Australia and Australia has widened once again. The state’s trend unemployment rate of 5.8 per cent compares with a national unemployment rate of 5.0 per cent. Unemployment rates remain well above the national figure in Western Australia (6.4 per cent), Queensland (6.2 per cent) and Tasmania (5.8 per cent), and noticeably lower in New South Wales (4.3 per cent) and Victoria (4.4 per cent).
Residential construction activity entering a downturn
Forward indicators released by the ABS in January suggest that residential construction activity in South Australia will weaken in the short term. The number of housing finance commitments for construction of homes or purchase of new dwellings in the 3 months to November 2018 was down 4.4 per cent compared to the corresponding period a year earlier. Meanwhile, the value of residential building approvals in trend terms in November 2018 was down 21 per cent compared to a year earlier. A similar pattern is observed nationally, with the value of residential building jobs approved falling by 14 per cent over the past year.