Economy in transition

More evidence that the economy is entering a long period of transition despite the messages of doom continuing to flow from Australia’s manufacturing.

Economy-wide employment rose by 14,400 in the three months to May 2014 – the slowest growth in nine months, but this came after an outsized 58,800 lift in jobs in the three months to February.

The real test will come in the next three months as the constraining effects of the Federal Budget flow through to the economy. But while figures from the Bureau of Statistics capture a slowdown in job creation that hasn’t stopped the housing sector from driving good jobs growh with professional services like architects, surveyors, conveyancing staff and real estate back in demand.

The economists at Commsec point out the housing market is labour intensive, which augurs well for job creation, spending and overall economic momentum. Accommodation and the food services sector also recorded solid job gains in the past three months, reflecting increased travel demand and that long period of warm autumn weather – causing more people to go outdoors to cafes and restaurants.

And while that transition away from the resource sector was taking hold, Australia’s population was continuing to grow, albeit at a slower rate – this time 1.73 per cent over the year to December 2013. Australia’s population stood at 23,319,385 people at the end of 2013.

“This is still one of the fastest population growth rates in the world and goes part of the way to address the financial challenges associated with the ageing of the population. And the attempts to boost population, participation in the workforce and productivity growth have been remarkably successful.” says Commsec.

In NSW, which is regarded as a lesser resource state, population grew by 1.5 per cent in the year to December – the fastest in four years and underpinning the lift in that economy. Even Tasmania’s population was growing at the fastest rate in two years.

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