A RECENT flurry of layoffs in the resources sector is unlikely to provide any reprieve for employers, with the labour market expected to remain tight in the near to medium term.
The state’s major mining companies have made significant redundancies as lower commodity prices and the strong Australian dollar continue to put pressure on profit margins.
Contractors and engineers have also begun cutting their workforces as demand falls.
But despite the layoffs - amounting to a potential 2,000 jobs or more in the past few months alone - the number of available workers is expected to remain at around three-year lows over the coming year.
The Chamber of Commerce and Industry WA expects a reduction in the state’s unemployment rate to about 3.5 per cent in 2012- 13 and even further to 3.25 per cent in the next financial year - less than the three-year low of 3.5 per cent recorded in June.
The forecast is despite the state’s labour force growing by about 5,000 people a month, according to data from the Australian Bureau of Statistics.
A survey by national recruitment firm Manpower has also reported a positive outlook for the labour market with expectations of an increase in the number of jobs being filled in the next two months.
The net growth in employment was expected to be 22 per cent for the final quarter of 2012; the outlook was for 32 per cent growth over the same period in 2010.
That growth is unlikely to come from the big miners, however, as Fortescue Metals Group, Mount Gibson, BHP Billiton, Gold Fields and Atlas Iron have all announced redundancies.
FMG’s cuts are by far the largest, with indications up to 1,000 staff and contractors could have been affected, but the number laid off at BHP Billiton is also expected to be significant.
“Against a backdrop of increasing costs and falling commodity prices, we continue to focus on reducing our overheads and operating costs,” a BHP Billiton spokesperson said.
“We don’t intend to provide any detail about specific adjustments but clearly there may be some impact on jobs in some areas.”
BHP Billiton’s reviews include assessing employment at its Nickel West operation but efforts would be made to redeploy redundant staff to some 900 available roles elsewhere within the company.
Mount Gibson and Atlas Iron have also made staff cuts, last week announcing redundancies of almost 300 staff to reduce costs and attempt to remain competitive.
Xstrata Nickel also let 150 staff go (of which 90 were contractors) after putting its Cosmos mine on care and maintenance at the end of September.
While the biggest cuts have been made in the resources sector, it was also the biggest employer over the past year. More than 24,000 positions were created in the mining sector in the past 12 months.
Recruitment firm Randstad’s WA operations director, Todd Allen, said this reflected an enduring positive outlook for the sector.
“While there’s ongoing debate around the outlook for iron ore, and this is affecting the top end of town, we’re still experiencing significant demand for labour within many midtier miners,” Mr Allen told WA Business News.
“And as a whole, construction projects that have commenced are still going ahead.
“Then, of course, there’s the significant demand for labour generated by our LNG projects, where we’ve seen no change.” Junior miners are also helping the labour market, with many expecting to take on additional staff in the current financial year; almost half announced intentions to grow their workforce in Grant Thornton’s recent survey of junior miners.
The next few months could be the most problematic for jobseekers. Mr Allen said he expected it to be early next year before those affected by the recent layoffs to be absorbed back into the market.
The impact of the top-end players’ reduced budgets has also spun off into the contracting sector.
VDM Group has announced it’s cutting 40 jobs in a bid to save $5.5 million annually, while Matrix Composites and Engineering is cutting its workforce by 69.
There are also indications contracting partner to BHP Billiton - the FAST iron ore joint venture (Fluor and Sinclair Knight Mertz) - has laid off up to 500 staff because of the miner’s pull back in the Pilbara.
FAST said it was unable to confirm any redundancies and referred inquiries to BHP Billiton.
About 30 staff at mobile accommodation manufacturer Desert Plains were laid off when the company went into administration, in September.
