National business and economic activity data released in the past week confirm the ongoing strength of the 2021 economic recovery.
To save you the hassle of combing through the ABS’s national accounts data and the May update on the Labour Market Information Portal I have cherry-picked the most relevant data and graphs for recruiters and provided some brief commentary, below.
National Accounts (for the quarter 1 January 2021 – 31 March 2021)
- In real terms, Australia’s GDP rose 1.8%, making the economy 1.1% larger relative to where it was for the December 2019 quarter. A similar increase in GDP per capita confirms that Australians are, on average, better off today than they were before the COVID-19 pandemic hit.
- Household spending rose 1.2% although it still remained below pre-COVID levels with Victoria leading the way growing 3.2 per cent.
- Private investment was the single biggest contributor to the quarter’s GDP result, rising 5.3 per cent.
- Growth in new home builds drove a 6.4% increase in dwelling investment, which together with a 10.6% increase in ownership transfer costs were the leading factors in 17 per cent of the March quarter’s GDP total increase being attributable to the construction sector.
- Private investment also benefited from an 11.3% increase in machinery and equipment investment
- Government spending rose by less than 0.2 per cent
My comment: The most important trend is that the critical government support across 2020 (by way of spending) has now been replaced with surging consumer and business spending on the back of optimistic households and bullish businesses. This is a trend unlikely to slow down any time soon.
Recruitment activity (for May 2021)*
- Some 51% of employers surveyed reported that they were recruiting or had recruited in the past month. This is the highest recorded proportion since this data collection began in June 2020.
- Employers in Western Australia were most likely to report that they were recruiting or had recruited in the past month (58%), followed by Tasmania (56%). Employers in Victoria (43%) were the least likely to have recruited.
- Employers in the Accommodation and Food Services industry were the most likely to recruit (69%), followed by Health Care and Social Assistance (58%) and Construction (54%).
My comment: It’s extraordinary that over half of all employers were recruiting in May. The unstated problem for employers in this startling statistic is that (with the stagnant national supply of new workers) a high proportion of all jobs will be filled with an already-employed worker. This will create a domino recruitment effect as the newly-hired worker needs to be replaced by their current employer. With no change to immigration on the horizon, it looks like happy days for recruitment agency job flow for well into 2022, I suspect.
Job advertisements (for May 2021)
In seasonally adjusted terms, job advertisements increased by 1.9% (or 4,500 job advertisements) in May 2021 to stand at 245,400.
This represents the 13th consecutive month-on-month increase in job advertisements which now exceed pre-COVID-19 levels by 46% and have reached a level not recorded since October 2008.
My comment: Almost all employers post ads when they have a vacant job and with vacancies destined to remain high for many months to come it’s hard to see how job ads are going to decline any time soon.
Recruitment difficulty* (for May 2021)
- In May 2021, 53% of recruiting employers reported recruitment difficulty, falling slightly from 54% in April 2021.
- ‘Blue collar’ occupations also remain considerably more difficult to recruit for compared with ‘white collar’ occupations (60% and 47% of recruiting employers, respectively).
- A lack of suitable applicants (48%) is the most common reason cited by employers for recruitment difficulty, followed closely by a lack of applicants (46%)
My comment: As any homeowner will tell you even getting a return call from a tradie is a win. Getting them to commit, and then deliver on your requirement is another challenge altogether. Given the surge in construction and inventory levels labour hire and technical recruiters with reliable candidate flow will be in an enviable position across 2021 and 2022.
- In May 2021, 21% of employers expected to increase their staffing levels over the next 3 months, slightly lower than the 24% recorded in April 2021.
- Employers in Queensland and South Australia were the most likely to expect to increase their staffing levels over the next 3 months (both 26%)
- Over the past month, expectations to increase staffing levels were expressed by 21 per cent of employers nationally
- Employers in the Accommodation and Food Services (29%) industry are the most likely to expect to increase their staffing levels over the next 3 months
My comment: This expected increase in staffing is on top of any replacement recruitment activity. Again, the domino effect across the economy of the candidate supply squeeze will be felt across the whole economy for many months ahead.
*based on a monthly survey of 1200 employers nationally