Employment Forecasts: skill shortages bite – migration to the rescue?
According to Deloitte Access Economics’ latest issue of Employment Forecasts, Australia’s labour market has been the standout indicator of success since COVID first hit. The unemployment rate is at 3.4%, a near 50 year low, while the labour force participation rate hovers near a record high, at 66.4%.
The impact of pandemic-era international border closures, combined with an incredibly tight labour market, has seen the number of vacant jobs reach new highs – to the point where there are now fewer unemployed people than job vacancies.
Going forward, growth in the Australian economy is expected to slow amid the impact of inflation running ahead of wages, rising interest rates, and weaker global economic conditions. Despite future headwinds, there are still opportunities for white collar workers in Australia, and it may still be some time before the number of unfilled job vacancies returns to more normal levels.
Deloitte Access Economics expects that total national white collar employment gains may moderate from a record breaking 352,200 in 2021-22, to a still strong 205,200 in 2022-23. National white collar employment is expected to grow on average by 1.6% per year between June 2022 and June 2032 – outpacing total national employment which is forecast to grow on average by 1.4% per year (Chart 1).
Chart 1: Forecast growth in national employment
Source: Australian Bureau of Statistics, Deloitte Access Economics
Recreation services is forecast to be the fastest growth sector for white collar employment during 2022-23 as international migrants, tourists and students gradually return and the risk of catching COVID subsides. Employment within the sector is expected to grow by 8.9% or 67,500 workers.
In terms of CBD markets, Sydney is expected to drive white collar employment in 2022-23, in part due to some remaining steam in its post-lockdown recovery (Chart 2). Growth of 12,200 workers is expected, but gains will in large part depend on Australia being able to return to typical levels of net overseas migration seen previously.
Chart 2: CBD market contribution to CBD white collar employment growth
Source: Australian Bureau of Statistics, Deloitte Access Economics
Net overseas migration was positive for the first time since the onset of COVID in the December 2021 quarter. The good news is that there are still more people arriving in Australia permanently, or long-term, than there are leaving – a strong indication that net overseas migration in Australia was positive through the first half of 2022, albeit a fraction of what it was before the pandemic.
The federal government’s Jobs and Skills Summit next week certainly represents a rare opportunity for government, business, and unions to collaborate on the right policy settings for the near and longer term.
Alongside policy to ensure we are developing the necessary skills for the future within Australia, there needs to be a focus on overhauling our needlessly complex skilled migration system to ensure we can also attract workers with the skills we need. The highest order priority is to clearly signal to the world that Australia is open for business – because our pandemic-era border policies created a lingering level of uncertainty among potential skilled migrants.
Migration comes in many forms, and while skilled migrants have been a recent key focus for business and the media, there are also other streams that can enhance Australia’s pool of labour. We have a great opportunity to expand our existing humanitarian migration program, with the longer-term economic and social benefits of doing so profound.
