According to the latest E.L.Consult Index on Executive Demand in Australia, the IT sector has been “torn apart and put back together” in the past few years, with demand falling precipitously.
However, E.L.Consult Managing Director, Grant Montgomery, says that there does seem to be “better sentiment" surrounding the IT industry, as it "drags itself off the bottom," with the IT index gaining 12 percent in September. However, as Montgomery cautions: “It should be recalled that this is off a very small base, accentuating percentage movements."
“Although it would seem that the industry seems to be on the rebound, there have been false dawns before and this could be another. A few more months of good performances will be required before a recovery can be recognised.”
“The level of executive jobs demand, particularly in a highly services orientated economy like Australia, gives an accurate and leading indication on the state of the non-resource sector. The serious falls in executive demand in 2012 have been on top of already steep drops in demand in 2011 as the international economy and then the Australian economy has slowed.
“This silent epidemic of unemployment in Australian executive ranks is very serious as many of the people who are now having difficulty finding work are highly successful, highly driven people, highly educated people.
“Unemployment is a new experience for many executives and can have deep impacts on middle Australian families.
Montgomery emphasises that executive unemployment is not highlighted by any statistics other than the E.L Index because generally executives don’t register for unemployment or other forms of government assistance, and they often do not even reveal their predicament to friends and family.
“While some other executives have been able find other jobs after being made redundant at their current roles, they’ve had to accept severely reduced remuneration and job responsibilities just to get back into the workforce.
“Executives having to accept reduced roles and pay is like those in the general job market who have to accept part-time or casual work because they can’t find full-time work. Except that in their reduced roles these executives are still expected to work 50-hour weeks.”
In its report for September this year, the E.L Index has fallen 35.8 percent since September 2011, which includes a three percent increase in demand in September 2012 compared with August 2012.
Montgomery said some sectors were still falling while others seemed to have reached a bottom. “The drop in positions available for executives in 2011 was particularly severe in financial services and management. However, these sectors now seemed to have bottomed.
“Despite the resources boom, sectors such as engineering which also fell in 2011 are still losing ground.
“These results are very typical of what tends to happen in recessionary times. There is a continuing slowing of Australian economic activity and it is continuing to leak into the mining sector as that also slows.”
Montgomery also points out that manufacturing is in the doldrums and may remain there for some time “as most is outsourced more and more to Asia.”
However, despite the poor current statistics, Montgomery says he has a medium-term positive outlook. “From here we are not looking at a wholesale retraction but we will see further signs of softening,” he said.
“Despite Australian economic strength in the resource sector there is little likelihood of an across the board improvement until there is an improvement in the bigger Western economies particularly like the United States.
“One of the keys for Australia is construction, particularly housing, which ultimately drives a lot of activities other a broad range of industries.”
On a state-by-state basis, Queensland, South Australia and New South Wales all fell further in September, but this was counteracted by a significant gain in Victoria to provide the impetus for the overall positive result.
The marketing and IT sectors led the way assisted by positive performances in Victoria and Queensland, while all other sectors were negative for the month of September, continuing on their negative performances recorded in the past year.