Finance Finance News Low dollar lifts rate of job advertisments

Low dollar lifts rate of job advertisments

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The number of job advertisements on the internet and in newspapers jumped 3.9 per cent in September, building on the 1.3 per cent gain made in August, according to seasonally adjusted figures from ANZ.

Job ads in the 12 months to September were up 12.8 per cent.

ANZ chief economist Warren Hogan said that while many non-mining companies are reluctant to hire, demand for labour in a range of service industries has strengthened.

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“Activity in these industries has been supported by the sharp depreciation of the Australian dollar, which has redirected spending back towards the domestic economy, and by low interest rates, particularly through robust housing market activity and its flow on effects,” he said.

“Hiring in the services sector also looks to have displayed some catch up over the past year or so following unusually weak outcomes.”

The strength of the services sector was backed up by other data out on Monday which showed that the services sector is enjoying its longest period of expansion in seven years.

The Australian Industry Group’s Performance of Services Index (PSI) fell 3.4 points to 52.3 points in September, but still managed to stay above 50, showing that activity is rising at a slower pace.

Ai Group chief executive Innes Willox said local tourism, retail and consumer services are benefiting from the lower exchange rate.

“Still-buoyant housing market activity is clearly a factor in the growth of some sub-sectors and there is some early evidence that changes in the political environment may have supported consumer confidence and sales,” he said.

ANZ’s Mr Hogan expects activity in the non-mining parts of the economy to remain solid in the coming month but expects it to fade heading into 2016.

“For this reason, we expect employment growth to remain reasonably healthy over the remainder of 2015 but to then soften next year,” he said.

“This is likely to prompt the Reserve Bank to provide a little more monetary policy support to prevent the unemployment rate from rising further.”

Almost two weeks ago, ANZ was the first of the major banks to forecast an interest rate cut by the RBA, saying the boost to the domestic economy from housing construction and the lower Australian dollar will wane.

ANZ is predicting a quarter of a percentage point cut in February and another in May, which would take the cash rate down to 1.5 per cent.

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