Western Australia’s labour market remains tight, with the highest employment participation rate and the lowest unemployment level of all the states, according to recent data from the Department of Treasury and Finance.
Western Australia’s labour market remains tight, with the highest employment participation rate and the lowest unemployment level of all the states, according to recent data from the Department of Treasury and Finance.
The department’s labour force statistics for November 2006 show employment rose by 0.8 per cent during the month of October, contributing to a 0.2 per cent rise in employment over the three months from August to November.
The unemployment rate fell by 0.6 percentage points to 3.1 per cent during November, an equal record low, while the annual average unemployment rate for the year to November was 3.7 per cent, down 0.8 per cent since the same month last year and the lowest average in three decades.
The state’s employment participation rate was virtually unchanged at 67.1 per cent, while the participation rate for the year to November was 67.6 per cent, exceeding all other states and the national average of 64.7 per cent.
Data from the Australian Bureau of Statistics also confirms the robust nature of the WA labour market.
An ABS report from last month stated the participation rate for males aged 15 years and over was 74.9 per cent in November, the highest rate for all states, while the participation rate for females in the same category was slightly lower at 59.3 per cent, almost 1 percentage point behind Queensland.
The ABS report also found indicators of employment demand remained strong, predicting any fall in employment growth would result from ongoing labour constraints rather than a decrease in demand.
With WA’s labour market performing strongly, the Chamber of Commerce and Industry of WA has forecast continued economic growth into 2008. The CCI released a report last week predicting the state economy would record a 6.5 per cent growth rate in the current financial year, and a growth of 5.25 per cent in the financial year 2007-08.
CCI chief economist John Nicolaou said there was evidence the strong local jobs market was fuelling higher levels of interstate and international migration to WA, and emphasised the need to continue to bolster the labour pool in order to sustain economic growth and cap unemployment rates.
“Western Australia currently leads the nation in population growth, with a net 25,000 people migrating into the state over the past 12 months, and this should continue to support household spending and dwelling investment at high levels,” he said in a statement.
“This growth in the labour pool is critical to the state’s economic wellbeing, given the labour shortages that pervade WA industries across a range of occupations.”
Given the low unemployment rate nationally, there has been some speculation the Reserve Bank may further raise interest rates this year.
The bank, which decided against a rate rise in December, is due to review rates next month.
The CCI has suggested that, while the extent of the impact of the 2006 rate rises was yet to be determined, labour and materials shortages continued to threaten economic activity, resulting in generalised price pressures and increasing the probability of further interest rate rises.
