The Reserve Bank’s rate rises might be taking their time to have a substantive impact on inflation and the labour market, but they are certainly making their mark on retailing.
The rate rises have seen retail sales growth flatten out from around September onwards to the point where February’s 0.2% rise left them still 2% or $700 million a month less than the record $35.8 billion in November.
A number of small chains and stores have closed or collapsed and others have reportedly cut hours, but some chains such as JB HiFi, Myer, Coles and Woolworths continue to report reasonable but slowing sales growth.
Employment has reportedly eased in parts of retailing with hours cut as well.
Now, thanks mostly to the growing weakness in retailing, job vacancies eased for a third quarter in a row in the three months to February but still remain substantially higher than before the start of the pandemic and higher than a year a year ago.
But the impact so far is at the margins.
The February quarter’s job vacancies data from the Australian Bureau of Statistics showed there were 439,000 job vacancies in February 2023, down 1% per cent (or 7,000) from November, according to the ABS.
That 1.5% fall in the latest period was much smaller than the 4.9% in the three months to November and the actual figure – 7,000 – was a third of the 23,000 in the previous three months.
It highlights the continuing tightness of the labour market which the NAB pointed out yesterday now sees an almost one for one ratio between vacancies and unemployed (its 1.16%).
ABS data shows that total employment grew 93,000 in the three months to February bolstered by the 65,000 surge in February, further underlining the strength of demand for jobs and employment.
So while total employment grew 93,000, job vacancies fell by just 7,000 and that was mostly due to the loss of jobs in retailing. And the sector where vacancies are highest – accommodation, culture, food services and the arts.
ABS head of labour statistics Bjorn Jarvis said, “the number of job vacancies was down by 9% from the peak in May 2022.”
While this was the third consecutive quarter of declining job vacancies in Australia, job vacancies remained high, he pointed out.
“Job vacancies in February 2023 were still nearly double what they were three years ago, just before the start of the pandemic. There is still a very high demand for labour from employers across Australia and across all industries.”
The percentage of businesses reporting at least one vacancy fell for the first time in six quarters, down from 28 per cent in November to 24 per cent in February. This was still more than double what it had been in February 2020 (11 per cent).
The quarterly decline in job vacancies was seen in both the private and public sectors, with each falling by around 1% from November last year to February this year.
Western Australia saw the largest quarterly percentage decline in job vacancies, down by 15%. NSW though recorded the largest percentage quarterly growth, up 9%.
“While there have been some recent falls in job vacancies in some states and territories, they continue to be high in all states and territories,” Mr Jarvis said.
While job vacancies fell in 11 of the 18 industries, they remained high across most industries when compared with February 2020.
“This continued to be most acute in the accommodation and food services and Arts and recreation services industries, where vacancies were around three to four times what they were before the pandemic,” Mr Jarvis said.
