In a surprising second month in a row, jobs for executives have skyrocketed. Is the economy doing better than everyone thought?
This boom in senior employment will likely lead to a general employment rise meaning we can forget about interest rates softening anytime soon.
Demand for Executive Positions in Australia in October 2024
The EL Index rose a massive 23 per cent, in the second consecutive monthly increase in what previously was a flat environment.
Mr Grant Montgomery, Managing Director of E.L Consult, a leading executive search firm that has researched and published the E.L. Executive Demand Index for over 30 years, said: “This is an amazing result, with the amount of confidence significant when looking at the overall economic position.
“Again, this month, the EL Index is showing very rapid employment growth,” Mr Montgomery said.
“So much in fact this month that we had to recheck all our algorithms to see if there was some compilation error.
“Last month’s rise in employment was stellar but to back-to-back that with another stella rise this month is starting to look very like a trend.
A Shift in Hiring Dynamics
“Last month was well explained by increased spending by government and the E.L Index is where this type of anomaly will show as it is the only employment index that analyses public and private hiring.
“But that is not the whole reason why we should see demand for executives growing to a 2-year record equal to pre-covid levels.
“If it was all government hiring then why did the number of government positions in marketing decline this month while overall new jobs in marketing increased Australia wide by 18 percent?
“It is as if the banks are enjoying some quantitative easing and lending to business like they haven’t for some time or perhaps it is government spending on consulting firms that are in turn doing the hiring?
“If that is the case then the RBA certainly has its job made very difficult and easing rates before the next election seems like an impossibility.
“Whether its freer capital, government job invention, or a booming economy may not be clear at the moment but it should be enjoyed because executives are the group most typified by the heavily mortgaged middle class.
Business Confidence Rises
While both the Reserve Bank and the Treasurer seem to be talking down the economy so as to reduce the pressure on inflation, business confidence for August also climbed to its highest level since January 2023 “as price pressures lessened”, according to the Reserve Bank.
“Business conditions were actually above the 50.0 neutral mark for the first time in three months and rising at the fastest clip since April. Even the Bureau of Statistics is saying that manufacturing, is preparing “a major rise” in investment next year.
“At the same time the US economy seems to be coming in for a soft landing, with the Federal Reserve
starting a loosening of monetary policy while employment is stable.” Montgomery noted.
All states and territories improved, led by Victoria among the large states and the ACT among the smaller regions.
Across the sectors, Information Technology led the way again with a significant 49 per cent climb due to private sector gains in New South Wales. Other sectors also gained, with Financial and Management again the next largest improvers.
Engineering was the worst performer producing a relatively small 6 per cent gain. Engineering is heavily influenced by infrastructure spending which has recently cooled.
Call Grant Montgomery on +612 9221 6688 or 0414926688 for further details
September 2024 Statistics
September 2024 National Index
September 2024 National Index: 680
Same period last year (September 2023): 604
Percentage change over last month: 23%
National Summary
The executive job market surged in September, registering its biggest non-seasonal affected increase since before Covid.
The EL Index rose 23 per cent – its second consecutive increase in what previously was a flat environment.
National Demand for Executives Over Last Seven Years
The recent gains have started to feed through to the long-term trends, but the trend is still lower than in prior years.
State by State Comparison
All states and territories improved, led by Victoria among the large states and the ACT among the smaller ones.
Employment Trends for Executive Groups
Across the sectors, Information Technology led the way with a massive 49 per cent climb due to private sector gains in NSW. Financial and Management weer the next largest improvers. Engineering due to a slowing in infrastructure spend was the outlier, producing a relatively small 6 per cent gain.
September 2024 E.L Finance Index
September 2024 E.L Finance Index: 1003
Same period last year (September 2023): 922
Percentage change over last month: 25%
Financial positions have burst out of the blocks to reach their highest level since May 2023. The Index rose 25 per cent in September.
Every state and territory moved higher over the month, with Queensland the biggest gainer out of the large states and Tasmania again the biggest gainer out of all the smaller regions.
Positions were higher in all advertising types except for print-based business sector, which was flat for the month.
September 2024 E.L Engineering Index
September 2024 E.L Engineering Index: 280
Same period last year (September 2023): 327
Percentage change over last month: 6%
Engineering recorded a 6 per cent increase compared with the prior month, giving it the smallest gain out of all the sectors for September.
The Engineering index remains in the middle of its recent trading range, meaning that in general terms 2023 was generally lower and 2024 has been basically flat.
The Engineering index received a sizeable boost from New South Wales and Queensland, but the gains were limited by small retractions in Victoria and the ACT.
Engineering can be a better indicator of long-term trends than other sectors as the number of jobs depend on the existence of long term projects most typically large infrastructure builds, which has been cooling for some months.
September 2024 E.L Management Index
September 2024 E.L Management Index: 1033
Same period last year (September 2023): 875
Percentage change over last month: 26%
The Management sector had another strong month, gaining 26 per cent in September compared with the prior month. This is the second-largest increase out of the sectors this month.
The result shows the Management index has taken off, with two consecutive months of very strong gains. It has clearly broken out of its longer-term trading range, pushing to its strongest level since the beginning of 2023.
Victoria and the ACT were the strongest regions. Only the smallest regions of Tasmania and the Northern Territory were negative.
Government sector ads in print media contributed positively to the overall result, as did business sector print media offers.
Management is strongly influenced by government hiring which provides a clear indication or that government hiring is at an all-time high.
September 2024 E.L Information Technology Index
September 2024 E.L Information Technology Index: 348
Same period last year (September 2023): 275
Percentage change over last month: 49%
Information Technology punched higher in September, climbing 49 per cent in September to be the largest contributor of overall Index gains.
Like all the sectors in September, business sector jobs growth led the way, while government jobs growth held on to the gains of August.
Gains were extensive in all states and territories, with NSW and Queensland producing the largest gains.
The talk is all abut the new boom in this sector as companies invest more and more in Artificial intelligence (AI) and there is no doubt that Australia, which currently leads the world in its uptake of this conceptually, is hiring at a rapid rate,
Whether AI leads to the boom in employment and productivity that some are predicting that remains to be seen.
September 2024 E.L Marketing Index
September 2024 E.L Marketing Index: 619
Same period last year (September 2023): 506
Percentage change over last month: 18%
The Marketing index is the only index to put together a straight quarter of positive results, gaining 18 per cent in September compared with the prior month.
The index is now higher than pre-Covid levels.
Amid the states and regions, Western Australia caught up to other regions after registering some recent falls, while other regions to show large increases included NSW, Victoria and the ACT.
Engineering recorded a 6 per cent increase compared with the prior month, making it the smallest gainer out of the sectors for September.
About the E.L Index
The E.L Index is a comprehensive monthly analysis of employment trends at executive level. An Australian analysis is produced in Sydney and an Asian analysis in Hong Kong and Singapore.
The E.L Index has shown by two separate University studies to correlate strongly with general economic and business trends. It is featured by most of the major news services and is closely followed by government and central bank analysts.
The E.L Index is actually a combined national index of all executive demand made up of five separate indices; E.L Finance Index, E.L IT Index, E.L Management Index, E.L Marketing Index and the E.L Engineering Index.
The National and specific career group Indexes are shown as relative indexes recording the monthly demand activity for executive positions in the current month against the demand in a historical base period which is normalised to 100. The historical base period used was the average of the last quarter of 1992 which research showed to be the bottom of that downturn.
By averaging to a historical base period the comparison of, say, June 1994 to June 2000 is meaningful, giving a clean, easily understood appreciation of changing investment and economic trends without seasonal obscurity.
The E.L Index utilises data from both print and internet sources and is the only employment index to do so.
The print data is collected from the major employment paper in each state. National papers are not used to avoid “doubling up”. Internet data is not collected off the web sites which can be subject to some error but instead collected through raw data provided by the ISP themselves. Print data has over 15 years of historical data and the internet more than 6 years.
Why Executive Demand is a Primary Lead Indicator?
It is often claimed that unemployment figures and broad-based job vacancy surveys do not give a fair impression of what is occurring in executive ranks. The E.L Index addresses this and has some interesting correlative and predictive qualities. Such as:
- Employment of management usually precedes the employment of skilled and unskilled workers.
- Employment of engineering executives precedes major capital investment.
- The division between various management sectors gives an indication of which sectors of the economy are experiencing growth or decline.
- Compares month-by-month changes in the public and private sector as well as monitoring government expenditure patterns.
- Makes regional comparisons after allowing for population differences.
- It shows a ‘rate of change’ and can therefore be realistically compared to general economic and employment growth, unlike some surveys that report absolute numbers.
- Core data is collected on an actual expenditure of business and government, not on a respondent’s opinion or confidence level.
