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The Australian
a day ago
- Business
- The Australian
What these three job market trends mean for employers
From the outside looking in, Australia's labour market looks robust: inflation is easing, wages align with expectations, and falling interest rates are boosting jobs amid already low unemployment. The numbers support this — over the past year, 389,800 people found employment, with roughly two-thirds of those jobs being full-time. The unemployment rate stands at 4.1 per cent, well below the historical average, representing one of the smallest unemployment increases following a major disinflation period in Australia's history. Underemployment has also declined since late 2023. However, these headline figures obscure some of the more complicated dynamics at play in the labour market and their implications for employers, which we have explored in Deloitte Access Economics' most recent edition of Employment Forecasts. Public Sector Leads Job Growth; White-Collar Expansion Slows Australia's economy is set to strengthen in 2025, supporting labour demand. However, some continuing economic challenges and global uncertainties mean many private sector firms remain cautious about expanding their workforce, instead focusing on maximising existing staff. Consequently, non-market employment — which means public sector jobs and roles in health, education, and social assistance — will continue to drive most job growth. In the year to December 2024, this sector accounted for about 80 per cent of employment gains. Overall employment growth is forecast to ease from 2.7 per cent (375,300 workers) in 2023-24 to 2.3 per cent (324,600 workers) in 2024-25, then slow further to 1.5 per cent (218,800 workers) in 2025-26, influenced by reduced public spending and lower net migration. David Rumbens is Partner, Deloitte Access Economics Of this, market sector jobs are expected to grow by just 1.2 per cent (113,700 workers) in 2024-25 and 0.8 per cent (84,400 workers) in 2025-26. In contrast, non-market sector employment is expected to rise 4.9 per cent (210,900 workers) in 2024-25 and 3 per cent (143,400 workers) in 2025-26. White-collar employment growth is projected at a modest 0.9 per cent — or just 48,600 workers — in 2024-25, the slowest since the pandemic slowdown of 2019-20. By contrast, blue-collar job growth is expected to ease to 1.7 per cent in 2024-25 and 0.3 per cent in 2025-26. Despite a focus on residential construction, capacity limits will restrict growth in construction employment. The human services sector stands out, with workforce growth expected at 4.1 per cent in 2024-25 and 2.7 per cent in 2025-26, significantly above the overall workforce average. Remote Work is Here to Stay The tug-of-war between employers and employees over working arrangements appears to have settled. Research from the Australian HR Institute (AHRI) shows that the share of employers requiring office returns has remained steady between 2023 and 2025. About 80 per cent of Australian HR professionals expect hybrid working arrangements to stay the same or increase over the next two years. Moreover, businesses with no office attendance mandate rose from 25 per cent to 28 per cent over this period. Hybrid work is now firmly embedded in Australia's labour market — roughly 40 per cent of employed Australians worked remotely late last year, well above pre-pandemic levels of 20-30 per cent (1989-2019). This isn't too surprising — Australian workers clearly prefer hybrid or flexible work. The ABS Working Arrangements report finds around 88 per cent of workers want to work from home at least partly, with 60 per cent favouring hybrid setups. Financially, an average Australian worker can save about $5300 annually on transport costs by working from home full-time, according to the Grattan Institute, who also highlight that flexible work supports participation among older Australians, people with disabilities, and carers, broadening the labour pool. While employee preference for flexible work is clear, its impact on productivity is less certain. Research by Professor Nick Bloom at Stanford University suggests hybrid arrangements boost profitability by reducing turnover without harming productivity. About three days in the office per week appear sufficient for mentoring and collaboration. For employers, flexible work will remain a key feature of the labour market. Balancing business goals with employee flexibility will be crucial going forward. Productivity Challenges and AI Opportunities With unemployment remaining relatively low and wages growing in real terms, it is clear that Australia's current labour market issues mainly concern low productivity growth — with clear implications for employers. Since peaking in March 2022, labour productivity has fallen 5.7 per cent, with productivity in the non-market sector near a 20-year low. Without improvement, this risks further damage to business performance and living standards. Improving productivity is, therefore, critical for governments and employers alike. One promising solution is the growing use of artificial intelligence (AI) in workplaces. AI's impact will vary across industries and roles. Deloitte's recently launched Work Analyser tool assesses AI's potential to streamline tasks and has been integrated into Employment Forecasts projections. AI-driven labour savings will likely alter how many tasks are performed, improving efficiency and often allowing higher-quality work, making certain roles more attractive. To stay competitive, employers who haven't developed an AI strategy should consider how the technology may change the way various roles at their organisation will be performed, whether that may require a chance to workforce composition, and how to use the efficiency gains generated. David Rumbens is Partner, Deloitte Access Economics. - Disclaimer This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ('DTTL'), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. Please see to learn more. Copyright © 2025 Deloitte Development LLC. All rights reserved. -
Gulf Business
6 days ago
- Business
- Gulf Business
Here's what the latest S&P PMI index says about the UAE
Image courtesy : Getty Images In a positive sign for the labour market, employment growth reached its highest level in the UAE in a year, as businesses expanded their workforce to meet rising workloads, according to the latest data from the This increase in staffing came even as the pace of backlog accumulation softened, according to S&P. Hiring activity was supported by a continued increase in new orders, although many firms appeared to be balancing expansion with caution as broader economic conditions showed signs of moderating. Read- Employment growth was the strongest seen in exactly one year. Respondents often attributed this to elevated workloads, as rising new orders contributed to another sharp increase in backlogs of work. That said, the pace of accumulation did soften slightly to a 16-month low, according to the index. Growth in the UAE's non-oil private sector economy The growth in the UAE's non-oil private sector economy slowed notably in May. The headline index also fell to its lowest level in nearly four years, signalling a softer but still solid improvement in business conditions. The seasonally adjusted PMI slipped to 53.3 in May, down from 54.0 in April. Although this marked the weakest performance since September 2021, the index remained above the 50.0 threshold that separates growth from contraction, pointing to continued expansion in the non-oil sector. Despite the dip in the headline figure, demand conditions across the UAE remained resilient. Companies surveyed reported a sustained rise in new orders, supported by favourable demand, strong client relationships, effective marketing strategies, and a diverse range of products. However, the rate of increase slowed slightly compared to previous months. As a result, business output also expanded, although the pace of growth moderated to its weakest since mid-2021. According to respondents, higher sales volumes continued to support activity, but some firms cited global economic uncertainty, particularly in connection with US tariffs, as a factor weighing on output levels. David Owen, Senior Economist at S&P Global Market Intelligence, noted the implications of the latest data. 'UAE non-oil firms signalled that growth had slowed in May, as the headline PMI fell to its lowest point since September 2021. Although businesses continued to welcome strong demand from their clients, there were some reports that competitive pressures and weaker trade amid US tariffs had weighed on growth,' he said. 'From an overall perspective, the survey signals that the UAE economy is performing well, but the softer increases in output and new orders hint at momentum easing. Furthermore, the sharp cutback in stocks (which was the fastest on record) and the broadly subdued outlook for activity suggest that firms are gearing up for softer growth,' Owen added. Drop in inventory as firms adjust stock levels One of the most striking developments in May was a record fall in input inventories, as businesses sought to streamline stock levels in response to cooling demand momentum. The drop in inventories coincided with a slowdown in backlogs of work, which grew at their weakest rate in 16 months. While workloads remained elevated due to strong sales, firms appeared increasingly cautious about future activity levels, adjusting their supply chains and inventory holdings accordingly. Cost pressures eased notably in May. Input price inflation slowed to its lowest rate since December 2023, providing some relief to firms. Only 5 per cent of respondents reported an increase in input costs compared to April, with some citing higher raw material and transport costs. Meanwhile, selling prices increased for the fifth consecutive month, though the rise was marginal. Companies noted that efforts to pass on higher costs to clients were offset in some cases by the need to offer discounts to remain competitive. 'Positively, the survey data backs up the trend of falling inflationary pressures, as businesses saw input costs rise at their slowest rate since the end of 2023,' Owen commented. Dubai sees growth In Dubai, the PMI held steady at 52.9, unchanged from April and marking the joint-lowest reading since early 2022. Nonetheless, the figure indicated continued growth in the emirate's non-oil private sector. New orders in Dubai rose at a four-month high, supported by improved client confidence, effective marketing, and competitive pricing. Business activity expanded sharply, though the rate of increase remained among the weakest seen in four years. Inventory levels in Dubai fell for the first time in 2025, while job creation was described as mild. Input cost inflation in the emirate also eased, reaching its lowest level in 17 months, helped by reduced inventory pressures. The S&P Global United Arab Emirates PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 1000 private sector companies. The panel is stratified by detailed sector and company workforce size, based on contributions to GDP. The sectors covered by the survey include manufacturing, construction, wholesale, retail and services.
News.com.au
14-05-2025
- Business
- News.com.au
Labour market remains ‘very tight' while employment growth eases
William Buck Chief Economist Besa Deda says the labour market has remained 'very tight' with early signs suggesting eased employment growth. 'The labour market has remained very tight, in fact, if we think about the last eight to nine months, the unemployment rate has kept between 3.9 and 4.1 per cent,' Ms Deda told Sky News host Ross Greenwood. 'It's barely budged from that trough over the last two years. 'On most indications, it's suggesting that it will continue to be tight, although there are some early signs that potentially employment growth is easing.'
Bloomberg
09-05-2025
- Business
- Bloomberg
Canada Adds 7,400 Jobs, Unemployment Jumps to 6.9%
Canada's tepid pace of job creation last month sent the unemployment rate soaring back to a level last seen in November, the highest since January 2017 outside of the pandemic. Employment grew by just 7,400 positions in April, and the jobless rate rose 0.2 percentage points to 6.9%, Statistics Canada data showed Friday. The median projection in a Bloomberg survey of economists saw similar numbers of jobs added but anticipated unemployment to increase by a smaller magnitude.
