According to the employment Index from E.L. Consult the fall in demand in January in the ICT sector was the largest of all market sectors surveyed.
And losses in ICT were significant across most large states, with a gain in Western Australian the only bright spot. South Australia also gained.
EL Consult managing director Grant Montgomery says the January loss in the technology sector comes in an environment where the ICT index gained only 7% over 2016 – the smallest gain out of all the sectors.
All five sectors — finance, engineering, general management, ICT and marketing — lost ground in January and, while ICT was the biggest fall, Montgomery says this could be down to the fact that employment in the sector is heavily weighted to contract work “which is highly affected by holiday seasons”.
Montgomery says the overall drop in demand for executives across all sectors is not a good start to 2017 and contrasts to most of 2016, when a growth trend developed through month on month rises – and doesn’t reflect well on the future for general employment either, as studies have shown that executive employment movements lead general employment by about three months.
“In an environment where many decision-makers are jumping at shadows it is not surprising that employers, particularly those employing the more highly paid white collar employee are sitting on their hands,” Montgomery says.
“There is no question that 2016 was an eventful year internationally and a lot of those events have untested economic implications for Australian businesses.
“While the (Donald) Trump election can easily be overworked as good or bad, no one can claim to know just what effect his policies will have on Australian’s trade position be it in relation to trade agreements or even the Chinese economy, our largest trading partner.
“Despite a queue of interest rate deductions recently we still have some of the highest interest rates amongst the advanced economies in the world and this is particularly so when comes to small business lending, our biggest and most vulnerable employer group.
“Every time the US Federal Reserve whispers about the possibility of US interest rate hikes, the impact on the Australian dollar is immediate and lasting and our capital trade balances suffer.
“Sure, Januarys with the large number of public holidays and the annual holiday closure of many businesses are generally not good measures for employment data."
Montgomery says the fact is that this January was even lower than January 2016, and if it is the “beginning of trend” then 2017 is “not looking great”.
“In January, all states and territories except for Tasmania fell. While Victoria largely held its ground, surprisingly it was the relatively strong regions Queensland and New South Wales which made the most negative impact on the overall index.
“It should be recalled, however, that New South Wales’s demand rose strongly during 2016,” Montgomery concludes.