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Employers cautiously optimistic about 2017

Australian employers appear to be keeping a level-headed approach to hiring despite broader economic and political uncertainty, according to the latest ManpowerGroup Employment Outlook Survey.
One outcome of the survey shows that hiring intentions remain cautiously optimistic, with some job gains expected and almost 80 per cent of businesses intending to keep their headcount the same in Q1 2017.
The resulting national Net Employment Outlook (NEO)[1] is +9%, down two percentage points from last quarter, and at the same level as this time last year.
“The hiring intentions forecast for the first quarter remains modest for the fourth consecutive year, suggesting that at the start of the year employers tend to wait and see how things pan out before making broader hiring decisions,” says Richard Fischer, managing director, ManpowerGroup Australia and New Zealand. “Across the board, there is certainly some positivity, with 13 per cent of employers looking to bolster their headcount with additional hires, while the clear majority – 76 per cent – are not intending to make any changes.
“If you look at what the last 12 months has bought from a macro political and economic perspective, it was certainly a year of uncertainty and change. We have had a double dissolution election in Australia, the ‘Brexit’ decision in the United Kingdom, and an American Presidential campaign. While there is arguably still some uncertainty around the impact of such events, business sentiment has been relatively stable throughout the year.”
A closer look at the Australian states showed Queensland employers reported the biggest drop in NEO quarter on quarter – down to +3 per cent from +10 per cent last quarter, and down from +8 per cent this time last year.
Fischer noted that the Queensland labour market remains weak, saying this is largely due to the end of ‘labour intensive’ construction across the resources sector.
“Queensland employers remain cautious in their hiring intentions heading into the new year – taking a ‘wait and see’ or ‘make do with what we have’ approach to hiring. The reason for this is three-fold – across the state a number of major construction projects have wrapped up such as BHP’s Caval Ridge mine; we are seeing falling commodity prices; and we have had weaker than expected retail growth, which has all led to a more subdued outlook. In regional centres this has also been exacerbated by the ongoing drought.
“The resources sector will remain a key driver of future growth, but the Queensland economy needs to manage the transition from construction to production in this sector. Outside of this sector there will be growth in residential construction, tourism and agriculture,” Mr Fischer said.
Other states that are predicting a slump in hiring intentions include Tasmania, with a NEO of +3 per cent, down seven percentage points quarter on quarter and an overall drop in three percentage points year on year. The Australian Capital Territory has recorded an NEO of +9 per cent, down five percentage points from the last quarter and an overall two percentage points from the beginning of 2016.
The transportation and utilities industry – which had the strongest forecast across the industry sectors last quarter – is expected to be sluggish in the upcoming quarter – with its NEO dropping from +17 per cent in Q4 2016 to +8 per cent. This is the same figure reported at the beginning of 2016. At the same time, finance, insurance and real estate and manufacturing both reported a drop of four percentage points, to +11 per cent and +4 per cent, respectively.
Table 1. Net Employment Outlook Comparison by Region

Q1 2017  Quarter-on-Quarter Change Year-on-Year Change
NATIONAL +9% ↓ (-2%) – (-/+0%)
SA +7% ↓ (-2%) ↑ (+5%)
QLD +3% ↓ (-8%) ↓ (-5%)
TAS +3% ↓ (-7%) ↓ (-3%)
VIC +13% ↓ (-1%) ↑ (+2%)
NT +7% ↑ (+1%) – (-/+0%)
WA +5% ↑ (+2%) – (-/+0%)
NSW +10% ↓ (-3%) – (-/+0%)
ACT +9% ↓ (-5%) ↓ (-2%)

 
Table 2. Net Employment Outlook Comparison by Sector

Q1 2017 Quarter-on-Quarter Change Year-on-Year Change
Finance, Insurance & Real Estate +11% ↓ (-4%) ↓ (-6%)
Manufacturing +4% ↓ (-4%) ↓ (-2%)
Mining & Construction +7% ↓ (-2%) ↑ (+7%)
Public Administration +10% ↑ (+1%) ↑ (+2%)
Services +12% ↓ (-3%) ↓ (-2%)
Transportation & Utilities +8% ↓ (-9%) – (-/+0%)
Wholesale Trade & Retail Trade +7% ↓ (-1%) ↑ (+2%)

 
Table 3. Net Employment Outlook Comparison by Organisation size

Q1 2017 Quarter-on-Quarter Change Year-on-Year Change
Micro (<10) +4% ↑ (+1%) ↑ (+1%)
Small (10-49) +7% ↓ (-4%) – (-/+0%)
Medium (50-249) +9% ↓ (-4%) – (-/+0%)
Large (>250) +17% ↓ (-2%) ↑ (+2%)

 
Table 4. APAC Q1 2017 results

 
Country
Q1 2017 Quarter-on-Quarter change Year-on-Year change
AUSTRALIA +9% ↓ (-2%) – (-/+0%)
CHINA +4% ↓ (-1%) ↓ (-3%)
HONG KONG +13% ↑ (+1%) ↓ (-2%)
INDIA +24% ↓ (-7%) ↓ (-19%)
JAPAN +23% – (-/+0%) – (-/+0%)
NEW ZEALAND +15% – (-/+0%) +4%
SINGAPORE +9% ↑ (+1%) ↓ (-1%)
TAIWAN +25% ↑ (+4%) ↓ (-2%)

 
[1] The Net Employment Outlook is calculated by subtracting the percentage of employers anticipating a decrease in hiring activity from the percentage of employers anticipating an increase in employment. Seasonal adjustment is then applied to the data.
 
 

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