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Updated: Mar 9

Labour market conditions in Australia remained strong during the December 2022 quarter, with both strong demand and growth in labour supply. However, there are signs of slight easing in the level of demand according to JSA's Internet Vacancy Index (IVI) and Recruitment Experiences and Outlook Survey (REOS). This easing in demand has led to a decline in total employment and an increase in the unemployment rate in the January 2023 ABS Labour Force figures.

The labour market is making better utilization of the workforce, as full-time employment growth remains significant, and underemployment rates have remained low relative to the past 20 years. The total employment continues to shift towards skill level 1 to 4 jobs, which require some level of post-secondary school qualification, while there is a decline in skill level 5 jobs that do not require such qualifications. This emphasizes the importance of higher education and VET systems to grow a highly skilled workforce.

Although recruitment activity slowed down during the December 2022 quarter, levels of worker retention have improved, leading to a decline in recruitment difficulty experienced by employers. The likelihood of filling an advertised role has increased slightly, indicating that skills shortages may have eased slightly in recent months. However, some concerns persist regarding key skills needs, where shortages continue to persist, especially for Technicians and Trades Workers occupations.

The highest vacancy rates are concentrated in engineering and medical professions, mostly in regional areas. Skills shortage for the top 20 occupations in demand is primarily driven by a lack of people with essential technical skills, reinforcing the importance of the domestic skills system in addressing these shortages.

Despite these challenges, wage growth shows promising signs, with the strongest quarterly growth rate recorded in the September 2022 wage price index result since 2012. Alternate measures of wages that reflect job mobility or newly advertised jobs also record annual wage growth rates greater than 4.5%, consistent with the workforce's shift towards higher-skilled jobs.

In conclusion, the Australian labour market conditions remained strong over the December 2022 quarter. Although some concerns persist regarding key skills needs and shortages, there are promising signs of improvement, such as higher wage growth and a shift towards higher-skilled jobs. The domestic skills system's importance is critical in addressing skills shortages and maintaining a highly skilled Australian workforce.

*Source: Jobs and Skills Australia -

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