Unemployment remains steady but small firms struggling to recruit

Unemployment remained steady at 4.9% in June and the number of new jobs soared by almost 24,000 but economists say small business is struggling to recruit appropriate staff.

Data from the Australian Bureau of Statistics reveals that the number of employed people rose by 23,400 in June, quashing economists’ predictions of a more modest increase of 15,000.

The number of people in full-time work rose 59,000 to 8.08 million, the number of people in part-time work fell 35,600 to 3.37 million and the participation rate rose to 65.6% in June, up slightly from 65.5% in May.

According to CommSec economist Savanth Sebastian full-time jobs growth was down by 80,000 in the past two months, indicating that the economy has lost some momentum.

“Small business is finding conditions difficult and they’re paring back on their hiring plans,” he says.

A breakdown of the states reveals that Tasmania continues to have the highest unemployment rate in the country at 5.5% in seasonally adjusted terms.

Queensland’s unemployment rate has increased to 5.3% and New South Wales saw its unemployment rate jump from 4.9% to 5.2%.

WA’s unemployment rate dropped to 4.2% in June as the mining boom continued to carry the state forward.

Victoria’s jobless rate fell from 5.1% to 4.6% and South Australia recorded a fall in unemployment from 5.4% to 5.1%.

Westpac senior economist Justin Smirk says in light of the figures the Australian economy cannot be reduced to the mentality of “the mining states versus the rest”.

“It is much more nuanced than that and while NSW is starting to struggle a bit and Queensland has been tracking sideways Victoria is still putting in a strong performance,” Smirk says.

“In fact on the jobs front Victoria is doing just as well as WA.”

Matthew Tukaki, chief executive of consulting firm The Sustain Group, says while the Australian economy continues to perform well in light of international events only certain industries are growing.

“If we have a look at the two-speed economy we see continued forecast growth and investment into the mining sector,” he says.

“We will see a significant increase in skills demand in the west into 2012 … the demand for workers across trades and other categories could cause peak skills demand in the economy.

“For those sectors not involved or attached to the mining boom employment and business conditions are linked to the recovery of the global economy or one-off issues.

“The challenge for the Australian economy will come when other sectors will begin the road to recovery which in turn will put more pressure on skills supply and demand.”