Australia’s unemployment rate hit a four year high in February and we can see the damage being done by the ending of the resources boom.
Queensland and Western Australia are hurting, although NSW, South Australia and Victoria still have higher jobless rates.
The growth in jobless in the two former boom states is quickening as companies from the sector, and among suppliers (and including property) cut employment levels.
It’s powering a rising toll of job losses that saw the largest number of full times jobs lost in a month for 17 years in February.
The more than 47,000 full time positions lost will add pressure for another rate cut when the Reserve Bank board next meets early next month.
The rise in jobless will start coming from the larger states, now that the process is well underway in the former boom states.
Queensland’s unemployment rate has risen and the number of people out of work has jumped 24,000 in the past year as the ending of the resources boom has seen workers in coal, zinc, lead, and copper mines, in the service sector, construction and property with the closure of mines, cutting of production and the crunching of the commercial economy along the coast, especially north and south of Brisbane.
The collapse of property development on the Gold Coast with Raptis and City Pacific and a number of smaller development on hold, in administration or not going anywhere, has particularly hurt the state.
Total employment in Queensland has risen over the past year, but not by enough to put a lid on the number of people out of work, which topped 62,000 in February, up from 28,000 a year earlier.
Major coal miners like Xstrata, Rio Tinto, Macarthur and BHP Mitsubishi have cut thousands of jobs in the past few months from their Queensland operations, while struggling OZ Minerals have cut staff at its Century lead mine in the north of the state.
Several small copper mines in the same area have closed or cut back.
The ABS figures showed Queensland’s unemployment rate hit 4.5% last month, from 4.4% in January and the boom time 3.6% a year ago when the state was still riding high on the back of soaring coal, copper and lead and zinc prices. 3,000 jobs were lost in Queensland in February.
The other boom state, Western Australia, saw 19,000 jobs lost over the year, with the rate rising to 4.2% from 3.3% in January and a tiny 2.8% in February 2008.
A number of mines across WA, including the expensive Ravensthorpe mine of BHP Billiton in the state’s south, have been shut or curtailed output: 11,000 jobs were lost in WA in February alone.
Sluggish NSW is the worst state with a rate of 5.8% in February (along with South Australia): around 74,000 people have been added to the ranks of the unemployed in the state in the 12 months since February, 2008.
The ABS reported yesterday that a net 1,800 jobs were created in February, a figures sharply at odds with the rise in the unemployment rate to 5.2%, the highest level in four years and with continuing reports of job cuts from the likes of Pacific Brands, car parts suppliers in Tasmania and southern NSW and meat workers in WA.
The report is also completely at odds with the 20,000 loss estimate from the market, with the unemployment rate worse than the market forecast of 5%.
The unemployment rate is up from the 4.8% in January, 4.5% in December and the low of 3.9% in February 2008, which marked the lowest unemployment rate for years.
But jobless numbers are rising: the number of unemployed has risen by 155,000 people since February last year, to more than 590,000 in February.
The number of full time jobs has fallen 34,000, but the number of part time work rose by around 110,000.
The 1,800 jobs created last month was up on the 1,200 jobs created in February.
The ABS reported: "Full-time employment decreased by 53,800 to 7,664,200 and part-time employment increased by 55,600 to 3,146,200.
"Unemployment increased by 47,100 to 590,500. The number of persons looking for full-time work increased by 44,400 to 426,000 and the number of persons looking for part-time work increased by 2,600 to 164,500.
"The unemployment rate” increased by 0.4 percentage points to 5.2%.
"The male unemployment rate increased by 0.3 percentage points to 5.1%, and the female unemployment rate increased by 0.5 percentage points to 5.3%," the ABS said.
The ABS said the participation rate "increased by 0.2 percentage points to 65.5%." And that’s another mystery: on the face of it it’s a sign of more people being confident about finding work. The 65.5% rate is near the all time recent high.
People worried about the future (as the consumer confidence figures have been telling us), are not expected to continue looking for work, especially if they have been made unemployed.
It’s at times like now, with bad news abounding, that people are supposedly discouraged from looking for work and the participation rate starts falling.
The ANZ, NAB and Westpac have all increased their forecasts for unemployment: they expect a peak of around 7.5% by midway through next year, compared to the peak of 7% estimated by Federal Treasury.
NSW saw its unemployment rate hit 5.8%, up from 5.5% in January and 4.1% a year ago. Victoria saw its rate rise to 5.6% from 4.8% and 4.1% a year ago as well.
Tasmania, the Northern territory and the ACT were unaffected: their unemployment rates were steady or lower on January and a year ago.
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