Job ads rise during June: Economy Roundup

The number of job advertisements published during June rose by 2.7%, according to the latest ANZ Job Advertisements Series, to a seasonally adjusted average of 169,690 per week.

ANZ reported that the 2.7% rise comes after a rise by the exact same amount during May, with the series now up by 32.2% from the same time one year ago – the fastest annual growth since November 2007.

Newspaper job ads fell by 1.6% in June, following a 4.4% decline in May. The only state to record an increase in newspaper advertisements was Western Australia, which is up 51.4% for the year.

Meanwhile, internet job ads are continuing to grow with a 3% increase in June, with that index now 33.6% higher than the same time last year.

ANZ chief economist Warren Hogan said in a statement the results suggest businesses are adopting a “more cautious stance”.

This is not unexpected given increasing concerns over the global backdrop. The recent decline in Australian business confidence and subdued activity in interest-rate sensitive, labour-intensive sectors of the economy, such as retailing, may also be constraining demand for new labour.

Despite the strong rise in total job advertising, the slowdown in newspaper job advertising growth does imply some impending moderation in Australia’s recent strong employment growth.

Hogan pointed out that the next batch of Labour Force data due this Thursday is likely to show some stalling in new job creation.

“A substantial private investment pipeline, an expected upturn in residential building construction and a solid outlook for the broader Australian economy, as national income receives a sizeable boost from the sharply higher terms of trade, should support ongoing jobs growth.”

“This should see the unemployment rate gradually ease through the course of 2010, and it may dip below 5% by the end of the year.”

Activity in the Australian services sector contracted for a second consecutive month in June due to weakness in consumer-focused segments.

The Australian Industry Group-Commonwealth Bank performances of services index rose 1.3 points to 48.8 points in June, but still remained below the 50-point threshold separating expansion from contraction.

AIG chief executive Heather Ridout said in a statement the result shows how the industry is suffering due to the withdrawal of stimulus.

“The services sector as a whole has had very little to cheer about for well over six months,” Ridout said. “It has struggled under the impact of successive interest rate rises and the phase-down of fiscal stimulus.”

Shares rise despite poor Wall Street performance

The Australian sharemarket has opened higher today, despite poor results from Wall Street late last week where stocks have no moved below the 10,000-point level. However, stocks fell later this morning.

The benchmark S&P/ASX was down four points or 0.11% to 4234.2 at 12.15 AEST, while the Australian dollar was down to US84c.

Commonwealth Bank shares were up 0.4% to $47.91, while NAB shares were down 0.9% to $22.85. Westpac lost 0.1% to $20.93 as AMP gained 0.4% to $5.15.

Meanwhile, CSR has agreed to sell its sugar division, Sucrogen, to the Singapore-based Wilmar International group for $1.75 billion.

“We have been working towards this objective for some time and having explored a number of strategic alternatives, the board believes a sale to Wilmar is in the best interests of shareholders and stakeholders in CSR,” company chairman Dr Ian Blackburne said in a statement.

The decision ends a battle between CSR and the Chinese Bright Food Group, which previously made a similar offer on 1 April.

CSR has said it will postpone the demerger of Sucrogen until 31 December. Managing director Jeremy Sutcliffe said the $1.75 billion price delivers significant value.

“Following the sale, CSR can focus on growing its building products business, which already has significant leverage to the Australia/New Zealand residential and commercial construction industries, combined with a strategic investment in a globally cost competitive aluminium smelter.”

NAB seeks extension on AXA deal

National Australia Bank has reportedly sought a further extension on its AXA bid, Fairfax has reported.

The media network states that NAB is completing an agreement to on-sell the APH North platform to fund manager IOOF Holdings. It is understood the ACCC will need two weeks to consider the proposal.

Meanwhile, Elders has said is it is being investigated by the Australian Securities and Investments Commission regarding the company’s continuous disclosure obligations.

“ASIC has specifically confirmed with the company that its enquiries should not be construed as an indication by ASIC that a contravention of the law has occurred, and nor should it be considered a reflection upon any person or entity,” Elders said.