White-collar employment to ease dramatically in 2023

In its latest quarterly employment report, Deloitte said white-collar jobs will grow by about 170,800 workers in 2023, compared to more than 778,000 in the previous two years.

And blue-collar jobs will slow down even more, forecast to grow by just 7,500 this year.

The report comes after last week’s national employment statistics from the Australian Bureau of Statistics that revealed that the unemployment rate jumped to 3.7 per cent from its low of 3.4 per cent at the end of 2022.

The report lead author, David Rumbens, said Sydney is expected to drive white-collar CBD employment in 2023, but the gains will in large part depend on Sydney receiving higher international migrant, tourist, and student numbers through the year.

Deloitte Access Economics expects employment to grow by 1.3 per cent in 2023 — much slower than the 4.0 per cent experienced in 2022 — and some areas will be hit harder than others.

It revealed that demand for workers has been trending downward for the better part of the last six months with a 7.5 per cent fall in job vacancies.

The ABS’ January Labour Force data showed employment decreased by 11,500 people nationally in seasonally adjusted terms in January, alongside an increase in the unemployment rate to 3.7 per cent.

Ignoring seasonal adjustment, this means that over 340,000 people left employment over the month, the largest-ever decline in a January release and as a share of the labour force, the decline was more in line with the 1990s than the last decade or two.

“While care should be taken not to read too much into a single month of data — especially since there was a higher than usual number of unemployed people expecting to start a job — the unemployment rate in January 2023 is already above the rate forecast by the Reserve Bank of Australia (RBA) for the June quarter of 2023,” Mr Rumbens stated.

He also noted in the report that wages growth has fallen way behind inflation and the government’s industrial relations reforms may not produce the effect it desired.

Report co-author, Blair Chapman, said the current environment suggests there may be relatively few businesses electing to use Cooperative Workplace Agreements, the new name for multi-employer agreements.

“Instead, the mechanism is more likely to be used as a threat by unions to ensure that businesses are prepared to come to the table to negotiate traditional Enterprise Bargaining Agreements,” he said.

“Although pockets of employment growth are still likely through 2023, there are clear signs that the pace of improvement has started to moderate and the RBA’s pincer movement on consumers and credit sensitive sectors will cost jobs.”