SYDNEY (Reuters) — Employment in Australia's hard-pressed mining sector fell by almost a fifth in the past year as tumbling commodity prices ate into profits, leaving it at its lowest ebb since mid-2011.
Yet twice as many new jobs have been created in professional, scientific and technical services — a catch-all that includes everything from architects to engineers to lawyers — courtesy of a boom in housing construction.
Figures from the Australian Bureau of Statistics show mining companies shed 44,000 workers in the year to February, taking the total in the sector to 220,400.
That shrinkage is set to continue as massive liquefied natural gas projects are completed over the next few years. The Reserve Bank of Australia (RBA) has estimated it takes 20 times more workers to build an LNG plant than are needed to operate it.
While mining is a small employer overall, accounting for just 1.8 per cent of the country's workers, the loss of those very well-paid jobs was a blow to household spending.
Just as well then that a major revival in home building has helped fill the gap, keeping jobs in construction steady overall even as mining projects wound down.
Professional services have enjoyed something of a renaissance with 99,000 net new positions created in the year to February. The sector now has a record 987,800 workers, more than manufacturing and the fourth biggest employer overall.
"The jobs lost in mining are well and truly being more than absorbed in other parts of the economy," said Savanth Sebastian, an economist at CommSec.
He noted that in the three months to February a net 76,300 jobs were created, the best quarterly performance in two years.
For the year to February employment rose by 187,00, or 1.6 per cent. Yet it was still not fast enough to keep up with the expansion in the workforce, itself a function ofAustralia's relatively rapid population growth.
As a result, the unemployment rate has risen gradually to touch a 12-year high of 6.4 per cent, suppressing wages and inflation and adding to the case for lower interest rates.
The RBA duly responded by cutting rates to a record low of 2.25 per cent in February, and is thought likely to ease again.
"From a policy perspective it makes sense to keep cutting interest rates to boost construction activity," said Michael Workman, a senior economist at Commonwealth Bank, tipping a move to 2.0 per cent in May.
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