Previous buoyant demand for Aussie executives was completely turned on its head in October when the EL Consult Index lost 15%, with the ICT sector reverseing out of most of the gains it made in September, falling 13% in an exact reversal of last month’s gain.
The ICT sector, however, kept the gains it made in August leaving it in approximately the middle of its recent trading range.
And, the majority of the losses in ICT came in Queensland and the ACT, with EL noting that print advertising created the majority of the “downward draft”, while web-based advertising also fell.
Describing the October fall in executive demand as a shock, EL says that after recording three consecutive months of gains in the period July, August and September, in October the Index fell 15% to be even below the July point.
Among the states and territories, EL managing director Grant Montgomery says the ACT managed the best result backed by a strong web performance and improved Marketing and Financial sector results.
Queensland was the only other state or territory to conclude the day in positive territory, also assisted by gains in Marketing, while of the large states Victoria recorded the largest retraction due to losses in Management and Marketing.
The EDL Index shows that Engineering, Management and Marketing made up the bulk of the monthly decrease, and despite falling compared with the prior month, in absolute terms Marketing is the largest supplier of executive-level jobs.
“October was a very tough month in the share market, matching the dearth of confidence in the executive demand market,” Montgomery said.
“In the share market the banks have been hit by changes in lending requirements and the uncertainty of the US Federal Reserve raising interest rates.
“Our other big sector, the commodities sector, has been hit by a lower price for iron ore.
“In tandem, these two factors have hit the share market and confidence generally.”
“In tandem too, every single industry sector of the E.L Index was off in October,” Montgomery notes, but says it should be recalled this loss in the E.L. Executive Demand Index comes “after a consecutive quarter of gains. This month has basically taken us back to June so there has been little overall change this financial year”.
Retail turnover figures for September show an increase of 0.4%, seasonally adjusted, to $24.5 billion which EL says is consistent with its September demand index.
“This shows there have been some signs of life in the domestic economy but not enough to spark the large decisions required for companies to invest in new executive positions,” said Montgomery.
“Now the E.L Index October result suggests a waning of confidence in the business community and is a bad sign for retail sales and general consumer confidence in the lead up to Christmas.
“Has there been a Turnbull effect? Probably not, confidence is slower to change and based on for more complex issues though the new political focus on business and tax needs to work through quickly.
“Business managers are realistic and they know when talk is just talk and when there is real effective action.”