Hiring dragged down by sentiment, doubt: economist

DOWNBEAT business sentiment and uncertainty about labour relations policy are making businesses cautious about taking on more workers, ANZ senior economist Liz Kendall said yesterday.

Releasing the ANZ Job Ads survey, Ms Kendall said the economy was already grappling with capacity constraints.

Job advertisements increased 2.2% in May, following a 2% fall in April.

Although job advertisements increased in May, they remained consistent with soft employment growth, she said.

‘‘The economy is dealing with some headwinds and that is affecting hiring.

‘‘We expect the recent softening in jobs will be temporary as the economy is supported by fiscal stimulus and high terms of trade.’’

However, downbeat business sentiment, if sustained, could continue to weigh on labour demand, Ms Kendall said.

Job advertisements rose only 0.1% on a threemonth moving average. Annual growth was stable at 3.9% on a threemonth moving average.

The construction industry was facing significant challenges, reflected in hiring data.

Construction job advertisements were up 5.2% in May but were still down 4.4% on the threemonth moving average as they continued to unwind from stellar growth earlier in the cycle.

Information technology continued to be the star performer, Ms Kendall said. Advertisements were up 18% in the year to date.

In the same period, health and education job advertisements had increased 9%.

Retail firms were cautions but hiring in the industry had held up.

‘‘Although job ads data is consistent with a softening in employment growth, it is in the context of a labour market that remains tight. Job ads data is consistent with the unemployment rate flatlining at its current low level of 4.4%.’’