The significant amount of economic damaged caused by the covid-19 outbreak in Sydney is starting to show up in the national employment data, and is unfortunately beginning to spill over into over states.
Figures published by the Australian Bureau of Statistics (ABS) illustrate that across Australia, women are losing jobs at a faster rate than men, while the youngest and oldest workers are losing jobs the fastest, as in previous lockdowns.
Between Saturday 3rd July and Saturday 17th July, the number of payroll jobs dropped by 2.4 percent on a national scale
The majority of those job losses occurred in New South Wales, where jobs declined by a much larger 4.4 percent.
“Payroll jobs” are tracked by the Australian Tax Office’s single touch payroll system.
Commonwealth Bank’s economics team is predicting that the national unemployment rate to jump in coming months, from 4.9 percent in June to 5.6 percent in October.
Payroll data shows job losses across the country
The period covered in this latest payroll data coincided with school holidays in every state and territory, so that has to be taken into account.
However, the data has captured the impact of the second and third weeks of the Greater Sydney lockdown, increased covid-19 restrictions in various regional parts of NSW, and the first two days of Victoria’s short lockdown in July.
Crucially, the data did not capture the restrictions imposed on the construction industry in NSW, because those were implemented after Saturday 17th July.
It will also take a few weeks before the payroll data captures the sixth lockdown in Victoria, which was announced on Thursday 5th August.
Commonwealth Bank is estimating NSW will record 300,000 job losses in the next couple of months due to the “extended lockdown” in Greater Sydney.
The data is showing that the number of bank customers receiving JobSeeker and other government benefit payments had been increasing in recent weeks too.
“Our concern is that the extended lockdown in Greater Sydney will lead to spillovers to other states. Greater Sydney is a large and important economy, and with recent lockdowns in other states and closures of state borders, we could see job losses in other states where disaster relief payments are not in place,” said Commonwealth Bank senior economist Belinda Allen.
The state of NSW makes up roughly a third (32 percent) of total payroll jobs and Victoria around a quarter (26.2 per cent).
As a result, lockdowns in these two states contributed to a strong fall in payroll jobs nationally, the ABS outlined.
Women, younger workers suffer the most job losses
However, the payroll data also showed women lost jobs at a faster rate than men in the first half July 2021.
Younger workers suffered the heaviest job losses of any age group.
Nationally, payroll jobs worked by women fell by 2.8 percent, while jobs worked by men declined by 2 percent.
However, in NSW, the numbers were far worse.
Due to Greater Sydney’s extended lockdowns, positions held by women declined by 5.3 percent in NSW, compared to 3.5 percent for men.
Positions held by 15- to 19-year-olds (-10.7 percent) and 20- to 29-year-olds (-7.4 percent) all fell sharply in NSW.
Positions held by workers aged 70 and over (-7.1 per cent) also declined noticeably.
Payroll jobs in NSW accommodation and food services (-19 per cent) and the arts and recreation services industries (-18 per cent) took a battering in early July.
Overall, the damaging labour market trends seen in last year’s national lockdown are being replicated in NSW at the moment.
The damage inflicted on the national labour market was “broad based”, with small businesses employing 20 employees or fewer shedding the most jobs (-6.9 per cent) in the two-week period.
When looking to the new future indicators of labour demand, such as the ANZ measure of job advertisements, also weakened in July but the NSW JobSaver program and Covid-19 disaster payments might limit the damage to the labour market.
As the Sydney lockdown continues hours worked will fall severely with the underemployment rate lifting between July and October.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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