A few months have past since the RBA have lowered interest rates, and my last report for that matter. So it’s high time that I check the impact of the lowered rates with the jobs advertised in our largest job search engine. And so what effect has the lowered interest rates had on our numbers?
Hmm. That might be a little bit too much to digest all at once. Here’s what I believe is going on:
The filters I’m using to create this chart once again:
- Work Type = “Contract”
- Sub Classification = “<Role>” e.g. Project Managers, etc.
- Location = “<City>” e.g. Sydney, Melbourne, Other (Brisbane, Perth, Adelaide, Canberra)
This is basically my quick view of investments. The results of those filters present a view on where various companies are spending money on projects, by way of jobs advertised. Here’s my takeout:
- PM’s jobs are down 18% compared to last month and 40% this time last year. That sounds pretty bad, and it is, but on the brighter side – I have seen a big up swing in the last week of November (last week) which indicates a strong finish. Why bring his up? We had a strong start in January this year [look past my headline and check the January bounce] and the numbers I’m seeing now suggest a repeat in Jan 14. The usual theory of the market sleeps in January and picks up in Feb, no longer holds true. A quick bounce up is certainly better than no bounce at all.
- And while I’m on the subject of PM’s, any increase in numbers here is a leading investment indicator on projects; which is a good thing. Project Managers manage, cut up the plans and oversee bodies of work whether they be regulatory change driven projects or pure growth initiatives. They lead to immediate job creation: Business Analysts, Developers, Testers etc. And after the project is rolled out, the work in theory is given to business as usual (and one can only hope that it creates new jobs – but on the flip side, existing staff may just be burdened with new work)
- We are hiring more BA’s than last month (up 6%). Not bad – if you followed the point above then this supports the strong finish and strong January theory
- A city observation: Melbourne and Canberra are spending BIG on projects at the moment. Either the big decision-makers have decided that the cash rate and environment is good enough to invest or they’ve really held investments back for a long time to a point where they must let the flood gates of spending through. Or both.
- Banking in Sydney is inching higher, up by 3%. It’s a drag everywhere else. But this does stand to reason as Sydney is the hub for banking (apart for the Retail / Business Banking sides of ANZ and NAB which are in Melbourne).
- Sales figure down 1% this time last year. A decrease is a decrease but hey, it’s only by a percent and it we could have been selling less.
- Mining. When you think of Australia, you think of Mining and not much else. That has been our past and is still unfortunately our present. How are we looking compare to this time last year? We’re down 58%. The rate cuts haven’t helped here. China where are thou.?
Like an industry insider once said, lowering interest will not induce his company to spend. Growth in the economy would. But given that everyone is waiting for growth to happen, we’re still largely in a holding pattern where one party is waiting for other to invest. In short, we’re still stuck in the slow lane for the immediate future.
And here’s what our friends at the IMF have predicted for 2014. A snippet on growth:
Growth will remain somewhat below trend in the near term as mining investment is expected to pass its peak this year and then fall sharply—we project growth at 2½ percent this year rising to its trend rate of about 3 percent by 2016. While resource exports will expand rapidly and contribute to growth going forward, the outlook for the non-resource sector is more uncertain. Cuts to interest rates since the end of 2011 have shown signs of generating some revival in interest-sensitive spending and could support housing investment going forward, but the soft labor market, excess capacity in the non-mining sector holding back investment plans, and the strong Australian dollar (which despite the depreciation since April still looks overvalued by around 10 percent), will continue to act as headwinds to overall growth.
Given these conditions there is a real possibility that the transition to broader based growth may prove to be bumpier than expected and the near-term growth outlook could worsen, especially if external developments keep the dollar from falling to levels consistent with fundamentals. If so demand for labor could fall, wage and employment growth slow further, consumption growth decline, and government finances weaken. The RBA has some room to respond, and the rapid and effective monetary transmission mechanism in Australia would allow for a nimble policy response should these risks emerge.
[now I haven’t checked the supporting data so I’m just going to take that at face value.]
Bumpier. Well I have to agree with that until China wakes up. If you’re in the Banking and Technology sectors, things are a bit better however. So depending on where you work, you can be better, or worse off.
And in case you wanted a copy of the data, click on this.
Until next year guys, have a safe and festive season. This is PC from JMD signing out.
PC @ MMA