Demand for executives in August was up across most states and all sectors, according to recruitment firm EL Consult which says the increased demand shows the Australian economy is strong and continuing on an upward track.
The rises in demand were led by Management, followed by Information Technology and Engineering – and Western Australia and Queensland showed the biggest increases.
The ACT was the only region registering a negative result, and New South Wales remains the largest provider of positions relative to population, despite being Australia’s most populous state.
“Executive employment in Australia is in a golden age. It may not last, but the general trend is higher and has been higher since 2015,” says Grant Montgomery, managing director of E Consult.
“While we remain below pre-GFC levels, the combination of record low interest rates, strong construction levels and a recovery in the resources sector have fired employers into action as they build further growth in their businesses.
“The past year has seen stronger improvement than previous years, with recoveries in other economies like the US putting more urgency behind the already strong standing Australian economy.”
According to Montgomery, executive employment can be volatile as it is a big investment and falls quickly if companies need to reduce their cost structure, but right now this is not the case, with Australians enjoying a buoyant economy and a strong outlook.
“The potential of higher interest rates, which could dampen business investment, seems remote and the Reserve Bank, while it balances inflation risk, is ensuring we don’t get out of sync and become uncompetitive with the low international interest rates,” he says.
“But of course, the big gorilla in the economy is housing construction and therefore the most vulnerable.
“Housing, at the moment, is at an interesting juncture, particularly in the apartment sector. Both apartment and house construction are slowing, but the glut is in apartments. Investors rushed into apartments because of the high levels of land tax associated with houses on land and consequently relatively better return on apartment investment.
“If there is any fiddling with negative gearing rules in the future, it is apartment construction that will be most heavily hit and rentals will have to rise substantially across the board to prevent a crash.”
Montgomery says currently housing construction is the key to the economic growth and “took over this mantle after the demise of the resources sector”.
“Resources has now revitalised itself somewhat, but would be unlikely to take up the slack if housing faulters. Infrastructure in our cities is also booming but is small relative to investment in the housing sector.
“Any change to the current economic buoyancy will be seen first in apartment construction.” Montgomery says.
“What does that mean for executive jobs? Well, engineering positions are vulnerable as are finance, but in the current climate this seems a long way off. Serious downturns always begin abroad and both Europe and the US have their own construction booms,” he cautions.
“Of course, the developing trade wars need to be watched, but given Australia’s program of low trade barriers, our lack of manufacturing and our close trade relationship with China, we are unlikely to be hurt too much.
“We are in a position that arguments among other countries are more likely to shift our markets, rather than cause any decline in our overall trade volumes.”