Australian job advertisements experienced a 13% decline in January amidst a cooling labour market

In January, job advertisements in Australia witnessed a 13% year-on-year decrease on a seasonally adjusted basis, according to ANZ-Indeed job ads data published on ANZ Bank.

Despite a 1.7% month-on-month increase in January, following a revised upward figure for December, the trend terms indicate a 0.1% monthly fall. The data also found a 15.5% drop in ANZ-Indeed Australian job ads from the November 2022 peak, yet it remains 39.9% higher than pre-pandemic levels of February 2020. 

ANZ Economist, Madeline Dunk, said, “ANZ-Indeed job ads have risen 2.3% over the past two months, following a steady decline over the previous 12 months. This stabilisation at a still-elevated level highlights the labour market’s resilience.” 

Vacancies per unemployed individual hit a two-year low of 0.68, but still double the pre-COVID level, according to the report.

Victoria led the increase in ANZ-Indeed Job Ads in January, compensating for the weakness recorded in New South Wales and Queensland, according to Indeed senior economist Callam Pickering.

"That said, the overall decline in postings over the past year remains concentrated in New South Wales and Victoria," Pickering said in a statement.

“There is no doubt the labour market is cooling, but we do not expect to see a significant downturn anytime soon,” Dunk said. “NAB’s (National Australia Bank) business survey showed 79.9% of businesses reported labour as a constraint on their output in Q4, and the unemployment rate remains historically low at 3.9%, despite a pick-up over the past few months. We expect the unemployment rate to rise modestly to 4.2% by the end of the year.” 

According to the economist, Australia's labour market is cooling, but they aren't expecting a significant downturn in job ads anytime soon.

"[National Australia Bank's] business survey showed 79.9% of businesses reported labour as a constraint on their output in Q4, and the unemployment rate remains historically low at 3.9%," Dunk said.

Indeed Senior Economist, Callam Pickering said, “In January, the increase in ANZ-Indeed job ads was driven primarily by Victoria, which offset weakness in New South Wales and Queensland. That said, the overall decline in postings over the past year remains concentrated in New South Wales and Victoria.” 

“The biggest contributors to January’s gain came from management and software development. However, software development also made the biggest subtraction from annual growth, with January’s increase ending 10 consecutive monthly declines. Overall, job ads in 86% of occupation groups are down over the year,” Pickering added.

As per the report, there was a widespread annual decrease across organisations, with the most significant declines observed in:

• Food preparation and service
• Software development
• Personal care

"Nevertheless, job ads in 80% of occupational categories are still above pre-pandemic levels," the report said.