The ICT index for June from EL Consult shows the sector continued its usual monthly volatility, but in some indication of the right trends across the financial year, the index remains at the top of the trading range established over the past two years, and the trend continues to be up.
In this latest report, the ICT index for June 2017 was at 165 compared to 166 for the corresponding period last year.
According to EL, the ICT sector in June was heavily financial services oriented, as the sector put its head down to ready for the new financial year.
Overall jobs growth for executives was up 20% across all sectors on the corresponding period (June) last year.
And according to EL, NSW leads the pack providing half of the country’s new executive positions, but Victoria was up there with its slightly bigger counterpart.
EL managing director Grant Montgomery said that looking at the national result as a whole the strongest supply of executive positions was in Australia’s two biggest economies, “no surprise there”.
“But what is surprising is just how much of Australia’s overall economy is driven by Victoria and NSW with a combined offering of 77.5% or more than three quarters of all new Australian middle management positions.”
Montgomery says that despite a 4% dip this June, due to a slowdown in hiring budgets, the EL executive demand index still points to an ever-strengthening economy.
“The small monthly dip of 4% was affected by the end of the financial year. It was particularly due to an almost complete halt in hiring by the public sector as departments run out of budget before the new financial year.
“The sector that suffered the most was marketing which runs closely on budgeting spends in both the public and private sectors.
“But the slight overall loss doesn’t take away from our assertion that the economy is doing far better than most people think.
“We note that our results are supported by the ratings agency Fitch who believe that Australia is about to share in the strongest bout of global growth since 2010.
“While Fitch believes growth in Australia will be less than the global result of 3.1% growth, coming in at 2.5% this year and 2.6% the next, this is still a lot stronger than the typical economic commentator is expecting.
“This is despite a prevailing level of pessimism based on property prices, interest rate jitters and to some extent a voter gloom and Federal government disenfranchisement.”
According to Montgomery, the EL Index has shown it leads general trends in the economy and employment by at least three months, “so with the recent rises over the last quarter lead us to maintain our prediction in April that the 2018 financial year growth has the potential to break through 3%".
“The road is not likely to be smooth with monthly volatility will be considerable but the trend is going to continue up and this will show up in general employment, retail sales and capital investment in the new financial year.”
Montgomery says the sector that suffered the most was marketing, which runs closely on budgeting spends in both the public and private sectors.
“But the slight overall loss doesn’t take away from our assertion that the economy is doing far better than most people think.”
Behind NSW and Victoria, all other states in the EL executive employment index represented a relatively small proportion of overall demand.
Queensland was next with 9.5%, followed by Western Australia with 4.7%, South Australia with 2.9%, the Northern Territory with 2.6%, the ACT 2.2% and Tasmania less than 1%.
“The outperformance of the ACT and the Northern Territory can be attributed to the heavy reliance on government positions in those regions. There is a minimum of executives required to run the government there, so economies of scale dictate they are going to recruit more management talent than the larger states,” Montgomery says.
Among the states, New South Wales was the largest contributor to the overall negative result after a positive result in the last survey. The ACT was also lower. Gains occurred in Queensland, which has now produced two consecutive months of gains, and the Northern Territory.
“The NSW losses came from engineering, management and marketing. Every industry sector in Queensland was higher,” Montgomery said.