National job vacancies fell 4 percent in April, compared to a 20.9 percent rise in March, according to the latest monthly data from IPA.
Rabieh Krayem, CEO of IPA, said employers were being cautious despite the generally upbeat economic and jobs news. “Our job vacancy index is not far off its 18-month high. In April we had more employers hiring than in March, but they were making smaller orders. Employers are building their teams tentatively, rather than aggressively.”
Krayem believes this caution stems from a combination of a nagging fear about the strength of recovery allied with some operational constraints. “Employers still bear scars from the GFC and will not risk over-burdening themselves. They know Australia is leading the world in terms of recovery, but they see the rest of the world still struggling. Furthermore, even companies who do want to expand are finding credit is still tight: it’s hard to borrow money from the banks.”
Krayem points to weaknesses in particular sectors that are traditionally large employers. “Construction and retail are doing it tough. Developers can’t borrow from the banks and I know some retailers have had a very bad first quarter. Rising interest rates will not help either sector.”
The upcoming Federal Budget and the Henry Tax Review have been a brake on recruitment, according to Krayem. “I believe many business decision-makers – large and small – are playing close attention to the government agenda and the impact of key policy announcements which has created some uncertainty.”
The response of the mining companies to the Federal Government’s decision to increase taxation of profits could have a big impact on the jobs market, says Krayem. “Mining has been the engine room of job creation in recent times. Clearly if projects are shelved because of the decision then the impact on employment would be significant.”
