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The mainstream media are full of big job loss stories
such as Alcoa, QANTAS and Toyota but out there in the SME sector, where the
economy’s engine really hums, there’s signs of life.

 

I have been speaking to a lot of recruitment agency
owners over the past 6 weeks and almost without exception they are all smiling
again. February was a much better month than January, December or November and,
even better, the pipeline for March is looking strong.

 

This good news was further reinforced with the
February results for the ANZ Job Index, released
early last week, which showed a monthly hike in listings of 5.1% to reach
131,189 listings, the highest since May 2013 and the largest monthly rise in
nearly four years.

 

I’m calling it. The job market is picking up steam and
the rest of 2014 is looking good. The real estate market in the major cities
has seen a surge in average prices over the past six months or so. This is
always the trend – real estate prices pick up as company owners and managers
receive greater profit share (Australian corporate profits were up 4.9% in the December
quarter and 10.3% over the year). Then the job market picks up as excess
capacity within businesses is absorbed and more jobs are created to meet demand
for greater production or delivery of services.

 

Vacancies registered with recruitment agencies are
always a trend indicator preceding official jobs growth. I expect that the
employment results for May (possibly April) that are released by the ABS in
mid-June will provide evidence of the trend that our industry is now seeing.

 

This market pick up is verified by the recently
released National Accounts for the December quarter which show seasonally
adjusted December 2013 growth (0.8%) as one third stronger than the equivalent
September 2013 growth figure (0.6%).

 

As Smart Company noted earlier
last week:

 

‘ …when (Treasurer Joe) Hockey held
his MYEFO media conference in December 17 last year to detail the contents of
what appeared to be a ‘slit your wrists’ assessment from the economy, the real
thing was gathering pace – that’s what successive figures for retail sales,
exports, the National Australia Bank’s business surveys and quite a few other
measures show.

 

Against that the jobs data was negative and looking like
it would worsen in line with forecasts, before it would improve. But the
turmoil over the Holden announcement had little impact on consumers: they
started using their savings (the household savings ratio fell below 10% for the
first time since mid-2010), spent more in shops, on property and overseas
travel.’

 

Professional services firm, Deloitte reported more
bright news last week:

 

‘(In) 2012-13 Australian exports of business services
(eg computer services, scientific services and professional services) totalled
$12.5 billion, up by 13% from the previous year and nearly balancing the level
of imports.

 

So buckle up. I expect the financial results for the
final quarter of this financial year to be the best quarterly result for our
industry for at least a year to eighteen months.

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