Across the world, developed economies are struggling to meet production, delivery and service needs, due mainly to a shortage of labour. The shortages, wrought by the halt of human movement across the globe during the pandemic, are now dire in many countries, including Australia and New Zealand. Source: IndustryEdge
In October, the Australian unemployment rate fell to 3.4% and the participation rate (people in work or looking for work), was stable at a very high 66.5%. Meantime, the important underemployment rate (people in work but looking for more hours) fell to a very low 5.9% and the number of hours worked by Australians lifted to 1,897 million.
The number of people in work surged 5.9% over the year-ended October, with a huge 762,000 additional people in work, most of whom, as the other data shows, have the hours they want. We think it is reasonable to say that Australia’s nominal pool of ‘spare’ labour has been exhausted and the only improvements to labour force capacity will come from migration.
That is a worrying prospect for Australia which now must compete with other advanced economies for the same pools of potential migrants around the world.
Perhaps most notable in the data is the huge spike in hours worked in October 2022. Not only have Australian never worked more hours, other than in the rebounds of the pandemic, Australians have never added more hours in a single month.
Perhaps most notable in the data is the huge spike in hours worked in October 2022. Not only have Australian never worked more hours, other than in the rebounds of the pandemic, Australians have never added more hours in a single month.
That will be unsustainable in the longer term, will drive fatigue and illness and certainly is a catalyst for higher wages. It also needs to be a driver for rapidly increased migration.
The recent experience of the Australian and New Zealand dollars against the US Dollar is increasingly important. In October, the New Zealand dollar fell a further 4.5% against the greenback, while the Australian dollar fell 1.3%, sharpening the downward trajectory and pushing the Kiwi lower than its weakest point in the midst of the pandemic. The Aussie is holding a little firmer – thanks primarily to continued export strength – but the flight to the relative safety of the Greenback will continue to place the local dollars under pressure.
For more information www.industryedge.com.au
