Australia’s official jobless rate could drop below 4% as soon as Thursday, market economists predict, as labour shortages force some restaurants to limit services, and recruiters dangle hefty pay increases to lure talent.
The nation’s unemployment rate will sink as low as 3.8% when the Australian Bureau of Statistics reports labour data for March, economists say. That would be the lowest rate since 1974.
While Labor leader Anthony Albanese stumbled earlier this week to say the latest jobless rate sat at 4%, the precise figure (for statistical nerds) was 4.042%. Since the ABS started releasing monthly jobs data, the rate has only been below 4% once, in February 2008, when it was 3.981%.
The consensus of forecasts is for the March unemployment rate to come in at 3.9%. ANZ has the lowest estimate among the big four banks, predicting the tally to come in at 3.8%, with the economy adding 50,000 jobs for the month.
Hiring signs have become increasingly common in shop windows around the country. However, employers such as Sydney Restaurant Group said it was a battle to secure staff even at higher wages.
“We’re short everywhere but finding good chefs is a very, very difficult task, as it is for all front-of-house people,” the group owner, Bill Drakopoulos, said. “Every position is hard to fill.”
On some days his company, which operates 15 venues mostly in the Sydney region, has been forced to limit the number of patrons it can serve. At other times, it has cut the 14 lunch and dinner standard shifts across the week to 10.
“The demand is certainly there,” he said. “It’s the … shortage of staff that is hurting us.”
Tim Nieuwenhuis, the managing director of Workfast Australia, a recruiter for industries ranging from construction to mining, said firms were “screaming for workers”.
“Most government projects are recruiting people as fast as possible,” Nieuwenhuis said. “We’re flying [new recruits] all over the country”.
Skilled staff who might have snared a salary of $100,000 a year before the pandemic were now asking for, and getting, as much as 40% more.
Nor had the federal election triggered any hiring pause. “Australian governments, either way, they love infrastructure no matter which party wins,” he said.
Alexi Boyd, the head of the Council of Small Business Organisations Australia, said finding workers “is still essentially the No 1 issue” for her group’s members.
“It’s stifling growth, it’s stifling their ability to innovate,” Boyd said.
The halt of international students and migrants during the Covid pandemic was one reason for the shortage, with conditions only slowly improving.
The lack of affordable accommodation in many regional areas also meant it was hard to house staff, she said.
Smaller firms were also less able to free up staff and time to train newcomers. Cafe owners, for instance, who might have been semi or fully retired, have had to return to their shops to serve as baristas or take on other roles to keep the doors open, Boyd said.
Many shopping centres, such as Elizabeth Street in Brisbane’s CBD, were littered with empty stores, a trend we could see more of if staff shortages persist.
“We need to open the pressure valves, otherwise we’ll see more of those shops close,” she said. Customers were starting to check ahead to see if a business is still open: “It’s become part of the psychology.”
However, business confidence seems yet to be dimmed by the challenges of filling jobs, at least according to the monthly survey released on Tuesday by NAB. Business conditions, for instance, rose 9 points last month to be +18, the largest one-month jump since June 2020.
Company profitability was holding up too, even with rising costs for inputs, NAB said. While wages are also increasing, the rate appears to be at a slower pace than other costs, the bank’s data showed.
