Job vacancies fall, but still just 1.1 unemployed person per job vacancy.

Key takeaways

Despite the number of advertised job vacancies falling, 27.7% of Australian businesses have at least one job they are currently unable to fill.

This is compared to peak pandemic, when it was just 6.5%.

The industries with the biggest excess demand for staff were accommodation and food services.

Replacing staff members who have left was the biggest reason businesses reported their vacancies.

The Australian labour market still heavily favours jobseekers, with the latest ABS job vacancy data for November revealing more than a quarter of Australian businesses have jobs they cannot fill.

Job vacancies fell 4.9% quarter on quarter in the three months to November, according to the latest release from the ABS.

Despite that fall, the number of job vacancies remains incredibly high, up 11.6% year on year and almost double its pre-pandemic levels (+94.8% on February 2020 levels).

In raw numbers, there were 444,200 vacancies in November compared to 228,000 in February 2020, an increase of nearly a quarter of a million.

Bjorn Jarvis, head of labour statistics at the ABS, said

"The number of job vacancies fell by 5 per cent over the three months to November 2022, and were down by 8 per cent from the peak in May.”

“Despite falling recently, the number of job vacancies in November was 12 per cent higher than November 2021 (398,000) and almost double what they were in February 2020 (228,000), prior to the COVID-19 pandemic."

The percentage of businesses reporting at least one vacancy again increased.

While the number of vacancies has begun to fall over the past six months, we are continuing to see a greater share of businesses reporting at least one vacancy.

It was 28 per cent of businesses in November 2022, a slight increase from August 2022 (27 per cent) and more than double what it was in February 2020 (11 per cent).

These figures continue to show the high demand for workers across many businesses and all industries, in a tight labour market.”

The decline in job vacancies was driven by the private sector, which generally accounts for around nine in every 10 vacancies.

Private sector vacancies fell by 6 per cent from August to November 2022 while public sector vacancies increased by 6 per cent.

When compared with the pre-pandemic levels, both private and public sector vacancies were close to double what they were in February 2020 (up by 96 per cent and 89 per cent respectively).

”There had been more rapid growth in private sector vacancies up to May 2022, from which they have fallen over the past six months," Mr Jarvis said.

"Public sector vacancies have increased at a slower but steadier rate over that period."

Just 1.1 unemployed person per vacancy

As a measure of labour market tightness, the number of unemployed persons per job vacancy remains at near record lows at 1.1 compared to 3.1 just prior to the pandemic.

On this measure, it is likely we'll be experiencing a period of wages growth.

Tapas Strickland, Head of Market Economics at NAB commented:

"Today’s data confirms the labour market remains tight, which continues to skew the risks on wages to the upside.

Governor Lowe has previously indicated WPI wages growth as high as 3.5-4% is broadly consistent with inflation returning to target and we will receive an update on WPI wages on 22 February, which will be important in assessing whether the RBA can afford to pause beyond March, given little signs of a slowdown in activity to date."

Increased labour supply may be one factor behind the fall in vacancies

Increased labour supply may be one factor behind the fall in vacancies since their peak in May 2022 with the labour force survey noting the population aged 15 years plus increased by 420,000 in the year to November 2022, from just 104,000 in the year to November 2021; prior to the pandemic, it was 333,000.

Labour demand indicators also remain strong as seen in the NAB Business Survey.

Source of Charts: NAB using ABS data

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.