Country Report Australia October 1996 Main report

Employment, wages & prices: Labour mkt cond'ns may be improving--

The unemployment rate continues to hover at or above 8.5%, but there are some signs that labour market conditions may be improving. Some gains in employment were made during the second quarter of 1996, offsetting the job losses which occurred earlier in the year, but virtually all the growth during the quarter was in part-time jobs. By June 1996 full-time employment stood below the level of January.

Since then, the trend appears to have changed. Around 9,000 jobs were created during July and the month saw a marked shift in the full-time/part- time ratio. Around 50,000 full-time jobs were created, while 41,000 part- time jobs were lost. It is extremely unlikely that a shift of this magnitude actually occurred during a single month. Instead, the changes are likely to reflect sampling errors rather than underlying change. Similar uncertainties surround the August labour force statistics, the most recent available. Although seasonally adjusted employment rose by 38,000 during the month, around 10,000 of these are believed to have been temporary positions associated with the census.

The unemployment rate hovered around 8.5% during May, June and July, before rising to 8.8% in August. The increase in August occurred despite substantial labour market growth (even allowing for the temporary nature of some of the positions) and reflects an increase in the labour force participation rate (the proportion of the working-age population in employment or seeking it). The unemployment rate is expected to remain high over the coming months, as any perceived improvement in employment conditions draws previously disillusioned job seekers back into the labour market.

--but strike activity is increasing

The new industrial climate and the end of Labor's wage accord with the union movement has given rise to increased strike activity. The disputes have been concentrated in highly unionised industries such as mining, oil refining, construction, car manufacturing and the ports

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information