Australian job vacancies grew by nearly 18.7% in the year to February. Public sector vacancies grew by 4.6% over the year, outpaced by a 20% lift in private sector openings which jumped to the highest level ever recorded. Along with strong employment growth, the increase in vacancies suggests worker shortages may soon start to emerge.
Now here's a chart that should offer hope to any Australian looking for a decent pay rise in the future.
From Callam Pickering, APAC economist for global job site Indeed, it shows the number of unemployed and underemployed workers per job vacancy in Australia.
Underemployed workers are those who already have a job but who want to work more hours. Unemployed workers are those without a job but who are actively looking for work.
The good news is that the number of unemployed and underemployed Australians per job vacancy continued to fall in the three months to February, adding to evidence that suggests stronger labour market conditions are reducing the number of underutilised workers in the labour market.
According to the Australian Bureau of Statistics (ABS), total vacancies rose by 4.4% to 220,800 in the three months to February, an increase of 18.7% in 12 months earlier.
Public sector vacancies grew by 4.6% to 19,100 over the year, far outpaced by a 20% lift in private sector openings which jumped to 201,600 - the highest level ever recorded.
"That’s a strong result that indicates that labour market slack in Australia continues to diminish," says Pickering, adding that "vacancies are rising across every state".
However, despite the surge in vacancies and employment growth seen over the past 12 months, stronger job market conditions and accelerating population growth has meant that the number of people entering or rejoining the workforce has also grown rapidly, keeping unemployment and underemployment levels higher that what would otherwise have been the case.
Despite reasonable employment growth in both January and February, Australia's unemployment rate has risen back to 5.6%, indicating that supply of labour outpaced demand over this period, leading to an increase in unemployed workers.
Given that many believe Australian unemployment will need to fall below 5% before any meaningful wage pressures emerge, it underscores why so few believe wage growth will accelerate by any significant margin for sometime yet.
Demand for workers is strong but so too is labour supply, meaning many businesses and industries are having trouble finding workers.
While that's unlikely to change anytime soon, Pickering says that given the current trajectory of the labour market, the prospects for higher wage growth are slowly improving.
"While there is still some way to go before stronger employment triggers higher wage growth, rising vacancies indicates that we are getting closer to that point," he says.
"Some firms are reporting a greater difficulty in finding staff and that may force firms to sweeten their offers for certain roles."