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Tuesday, 7 April 1998
Page: 2719

Mr Martin Ferguson asked the Minister for Employment, Education, Training and Youth Affairs, upon notice, on 2 March 1998:

(1) Will he provide full details of the data on which he based his statement on 29 December 1997 concerning positive forecasts of employment growth for 1998.

(2) Had his attention been drawn to contrary indications from other data before he made the statement; if so, was his Department consulted about the overall interpretations he placed on the sets of data.

(3) What is his Department's advice on forecasts of employment growth for 1998 and what is the basis of the advice.

Dr Kemp (Employment, Education, Training and Youth Affairs;Minister Assisting the Prime Minister for the Public Service) —The answer to the honourable member's question is as follows:

(1) On 29 December 1997, I held a press conference commenting on employment growth. The only reference to forecasts was the Budget and Mid Year Economic and Fiscal Outlook forecasts which are provided by Treasury. The optimism which I expressed about meeting those forecasts was supported by the strong growth that had been reported in the ABS Labour Force estimates for November 1997, the continuing rise in the DEETYA leading indicator, trend increases in the ANZ vacancy series and DEETYA Skilled Vacancy Survey and improvements in hiring intentions surveys such as Morgan and Banks and Drake International.

I also pointed out that statements made by employers in their interviews with the press provided another positive sign for employment growth. A summary of the ABS Labour Force Statistics and the various indicators and vacancy series for the period preceding the press conference is provided in Attachment A.

(2) My Department had briefed me on an easing in some indicators in the ACCI-Westpac Survey of Industrial Trends and on developments in Asia. These indications did not alter the overall impression for a positive outlook for employment.

The Department advised me that the Budget forecasts for through-the-year employment growth in 1997-98 and the unemployment rate in the June Quarter of 1998 should be achievable.

(3) The Department advised me that the Budget employment growth target of 2.25 per cent between June Quarter 1997 and the June Quarter 1998 should be achievable. This advice was provided on the strength of data, indicators and vacancies. For example:

- economic activity was clearly strengthening, with real GDP(A) estimated late last year to have been growing at an annualised rate of around 6 per cent in the half year to the September Quarter 1997, compared to 3.6 per cent over the year to the September quarter 1997;

- in the year to October 1997, retail trade grew by 5.4 per cent (trend) and dwelling approvals rose by 11.3 per cent (trend); and

- the ANZ job advertisements series increased by 17.8 per cent (in trend terms) over the twelve months to November 1997—this was the largest annual increase since March 1995.

Similarly, the Department has advised that the Budget forecast of an unemployment rate of 8 per cent in the June Quarter of 1998 should be achievable, given the good employment outlook and assuming no major rebound in the labour force participation rate.

With regard to employment growth prospects (as opposed to forecasts) by industry, the Department has stated in DEETYA Job Futures 6: Information for Careers Advisers, June 1997, that there are better-than-average job prospects in retail trade and in accommodation, cafes and restaurants (which is closely linked with the tourism industry) and average job prospects in construction.



. The ABS Labour Force Survey indicates that (seasonally adjusted) a total of 70,900 new jobs were created in the month of November 1997, bringing the total to 145,300 new jobs for the three months to November 1997. Of the 145,300 new jobs, around 80,000 have been full-time. The unemployment rate (seasonally adjusted) was stable at 8.4%.

. The ANZ Job Vacancies series and the DEETYA Skilled Vacancy Survey index continued to rise in November 1997. The ABS job vacancy series also increased in August 1997 (quarterly release). The ABS and ANZ series were at historically high levels in trend terms.

- The ANZ noted that the level of job advertisements for November 1997 was consistent with net new job creation of 16,000 per month over the next three months and if sustained, the Government would meet the Budget forecast of 2.25 per cent employment growth between the June Quarter 1997 and the June Quarter 1998.

. The Drake International Hiring Intentions Survey indicated that hirings were expected to increase by 1.3 per cent in the October—December Quarter 1997, considerably higher than for the same period last year. Retail, hospitality and business services sectors anticipated the strongest growth.

. The Morgan and Banks Job Index for November 1997-January 1998 recorded the highest level of job optimism since July-September 1995. The most optimistic industries for the quarter were information technology, advertising and construction/property.

. The DEETYA Leading Indicator of Employment leads turning points in cyclical employment by an average of around 10 months. It turned up in November 1996 and continued to rise in October 1997.

. The Westpac-Melbourne Institute Leading Index of Economic Activity rose marginally in September 1997. Except for a small fall in August 1997 the index has been rising since September 1996.

. The ACCI National Survey of Business Expectations and the Yellow Pages—Small Business Index provided a positive outlook for business conditions and employment expectations. The National Australia Bank's Monthly Business Survey claimed that confidence and prospects lowered from the October 1997 high due to the impact of the Asian crises, although labour market conditions strengthened in November 1997. However, ACCI-Westpac Survey of Industrial Trends indicated that business confidence in the manufacturing sector declined during the December Quarter 1997, including an expectation of further labour shedding.

. In the DEETYA Job Futures 6: Information for Careers Advisers, June 1997, better-than-average job prospects were recorded in retail trade and in accommodation, cafes and restaurants (which is closely linked with the tourism industry) and average job prospects in construction.