There is a chronic skilled worker shortage across industries, including in manufacturing.(ABC News: Peter Drought)
Australia's jobs market has continued to strengthen, with unemployment falling to an equal record low of 4 per cent.
The last time the jobless rate was this low was August 2008, and it has never been lower in ABS data going back to 1978.
We would need to go back to the mid-1970s to find a similar level of unemployment, noted KPMG's chief economist Brendan Rynne.
Between World War II and the 1970sunemployment in Australia was more typically around 2 per cent, but those figures pre-date the current ABS labour force survey.
The monthly Bureau of Statistics figures estimated that 77,400 extra people were employed in February, taking unemployment down from 4.2 to 4 per cent.
Hours workedrebounded 8.9 per cent, recovering from the COVID-19Omicron wave of absences that saw working hours plummet in January.
But the ABS head of labour statistics, Bjorn Jarvis, said the effects of Omicron were still evident.
The number of employed people working no hours over the entire week due to illness or sick leave was around 80 per centhigher than what we would usually see in February, having been around triple the usual level in January.
The underemployment rate eased slightly to 6.6 per cent, and the proportion of Australians either in work or looking for it also rose to a record high of 66.4 per cent.
Participation rose to a new record high in February and was around 0.6 percentage points higher than the start of the pandemic, Mr Jarvis observed.
The increase in participation continues to be particularly pronounced for women, rising 0.2 percentage points to a further record high of 62.4 per cent in February, and now 1.2 percentage points above the start of the pandemic.
Mr Rynne said that makes the unemployment number even more extraordinary.
This super-low unemployment rate has occurred when participation in the labour force is at all-time highs – meaning the unemployment rate hasn't just dropped due to workers withdrawing from the labour market, he noted.
Employers struggling to find skilled staff
Chris Kenny'ssheet metal pool manufacturing business is busy, and he is struggling to find enough skilled workers to keep up with the jobs coming in.
Bradford Products MD Chris Kenny just hired a new fabricator, but is still trying to fill four more positions.(ABC News: Peter Drought)
His business, based in the outer-Melbourne suburb of Dandenong, started a new worker this week, but Mr Kenny has four more roles he is stilltrying to fill.
We really need people whoare skilled in working with sheet metal and all facets of fabrication, he told The Business.
This is a dying industry,in terms of fabrication,and manufacturing in Australia in general has been quite hard hit.
Sothe challenge for us is that we're looking for people who have the necessary fabrication skills to come in and contribute to the business and fulfil the manufacturing opportunities that we have.
Nathan Meier joined the company on Monday as a fabricator.
Fabricator Nathan Meier is looking forward to progressing his career with his new employer.(ABC News: Peter Drought)
He was employed in a different roleat another business, but wanted a job that gave him a better work-life balance and also the chance to develop his skills.
My previous job never ended. Six, seven, eight o'clock at night I'd be on the phone, and Saturdays and Sundays, he lamented.
I just wanted to come in, bepart of a team, do somework and not have to worry about answering the phone.
'Pressure on wages'
In busy periods, Mr Kenny has been using labour hire firms, or workers on short term contracts, to supplement his core staff.
He said those rates have skyrocketed.
We've certainly seen some pressure on wages, particularly in the last six months, he said.
For example, labour hire, which we usea little bit of in the business, we've seen that double in terms of the rates in the last six months and also obviously there's increasing pressure on wages across the board.
Labour shortages and wage pressures are being felt across industries and aroundthe country.
Recruiter Graham Wynn said regional areas, like Shepparton in Victoria where he is based, are struggling to fill extra services jobs to meet their growing populations.
Recruiter Graham Wynn says the jobs market will be tight for at least another 18 months.(ABC News: Emilia Terzon)
Sheppartonis certainly struggling at the moment for those retail, hospitality, agricultural, any sort of blue collar workers as well, he told The Business.
Those jobs are normally filled either by backpackers or people on overseas visas, students. We haven't had any of those for the last two years in Shepparton, so that's why there's such a shortage of people right now.
Mr Wynn said thestrong demand for roles was showing up in the pay being offered to new recruits across industries.
He recently hired for a welding company, which offered more money to secure a worker.
Normally that pay around $30 to $33 an hourfor a person for that kind of job, at the top end of the scale, they've had to now go to $36 or $38 per hour, just to get somebody in, who wouldn't be as skilled, he observed.
Certainly IT has been in high demand since COVID started, with more companies' infrastructurechanging...they've certainly seen their wages increaseas well.
We had a help desk support person for an IT company in the past paid around $60,000 to $65,000 a year to do that, we filled one [job]recently for about $75,000, so an extra $10,000 to $15,000.
Mr Wynn said businesses are also poaching workers from each other as they struggle to get skilled workers.
Those who are anygood, who've got skills, they're working, they're not unemployed, he said.
So they[businesses] are having to entice them to leave one company to go to another company and money is the only thing theycan offer them extra.
Mr Wynn does notsee the jobs market normalising until well into next year, after migration returns to pre-COVID levels.
I think this could take at least 18 months to start correcting itself, to get that influx back into the country, of the people who do these jobs.
CEDA senior economist Gabriela D'Souza agrees.
CEDA senior economist Gabriela D'Souza thinks it will likely take up to two years for renewed migration to ease skills shortages across most industries.(ABC News: Michael Barnett)
We do have an estimate that the [federal] government hopes to resume its NOM [net overseas migration]figures back to 235,000 by 2023-2024, she told The Business.
I do suspect that, by the time that happens, the labour market will start to stabilise and employers might not be as cranky about not having as many workers around in the workforce.
We do estimate thatwilladd to some of the slack in the labour market.
https://www.abc.net.au/news/2022-03-17/unemployment-falls-to-4pc-as-hours-worked-recover-from-omicron/100917296
