Executive job demand in Australia rebounds sharply
Government spending on recruiting bureaucrats plays a large part in the increase
The gains are across all employment sectors and states,
Demand for Executive Positions in Australia in September 2024
The executive job market has surprisingly bounced back to health in August, with the E.L. Executive Demand Index rising to its highest level this year.
The E.L Index climbed 11 per cent, with gains across the board – all regions and all sectors.
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, said:
“Lo and behold, with all this gloom and doom about, the E.L. Index is showing unusual signs of life.”
“In fact it with its 11 per cent increase in August it has risen to its highest point this year,” Mr Montgomery said.
A Bureaucrat-led Recovery
“The gains have come across all commercial sectors and states – particularly the Financial, Management and Information Technology sectors,”.
“But excessive government hiring played an enormous role in the overall increase. A much greater role than is historically the case,” Mr Montgomery said.
“But the important point remains if you are an executive and seeking work, government is the place to look.”
Can it last?
“Of course, this larger spending on new government recruits is not without criticism. As it amounts to greater government spending and that is bad for inflation and not great for productivity either.”
“E.L Consult thinks that increases prompted by government spending are illusory and cannot be sustained over time. Increasing bureaucrats at a time when there is little or no economic growth is of little benefit. Only private-sector hiring can enhance Australia’s economic growth.
“The E.L Index is a lead index and shows trends three to six months ahead so if the Index can hold on to these gains, the Reserve Bank of Australia will need to hold off cutting rates.”
“The Treasurer has said that the level of interest rates is “smashing the economy”, and the markets are expecting rates to start falling in the first quarter of 2025, but if employment starts to take off again then rates can be expected to stay at their current levels for some time.”
“In contrast to this month the E.L Index has been showing a severe downturn over the last quarter and even with this month’s improved hiring shows the will be the lowest July result since 2021.”
“This has been coinciding with Australian inflation remaining above the RBA’s target range at 3.5 per cent, and growth falling to 0.2 per cent in the June quarter.”
“Excluding the COVID-19 pandemic period, the annual rate of economic growth is now the slowest since 1991-92, the year that included the gradual recovery from the 1991 recession.”
Where to from here?
“The trouble with the Reserve Bank trying to get inflation down via higher interest rates is that the effect is lagged. Many mortgage holders were on fixed-interest loans and now they are only just being hit with around 4 times the monthly repayments they had when they first took out their (possibly) over-extended loans.”
“The retail sector is now seeing a massive fall in spending as people’s savings run out and repayments rise.”
“Whether this month’s recovery is a ‘dead cat bounce’ or not we will see over the next quarter.”
“But if employment continues to improve that is looking good for the Federal Government and a possible early election.”
“However, it will be a tightrope walk because if higher employment re-starts inflationary increases and the RBA has to further tighten monetary policy, That is even higher interest rates.”
All states and territories improved, led by Queensland again among the large states and Tasmania among the smaller regions.
Among the sectors, Information Technology led the way with a 16 per cent uptick provoked by a very large number of government sector positions. All other sectors also gained, with Financial and Management demand sporting the next biggest increases.
Call Grant Montgomery on +612 9221 6688 or 0414926688 for further details
August 2024 Statistics
August 2024 National Index
August 2024 National Index: 552
Same period last year (August 2023): 614
Percentage change over last month: 11%
National Summary
The executive job market bounced back to rude health in August, with the E.L. Executive Demand Index rising to its highest level this year.
The Index climbed 11 per cent, with gains across the board – all regions and all sectors.
National Demand for Executives Over Last Seven Years
The recent losses since February 2023 have moderated with the gains this month.
State by State Comparison
All states and territories improved, led by Queensland again among the large states and Tasmania among the smaller regions.
Employment Trends for Executive Groups
Among the sectors, Information Technology led the way with a 16 per cent uptick provoked by a greater number of government sector positions. All other sectors also gained, with Financial and Management demand the next largest improvers. Government positions added strongly to overall demand.
August 2024 E.L Finance Index
August 2024 E.L Finance Index: 806
Same period last year (August 2023): 882
Percentage change over last month: 14%
Financial positions are still on their general downward trend but gained 14 per cent in August.
Web-based government positions showed a greater amount of contribution to the overall result than is usually the case, particularly in the ACT, Queensland and Western Australia.
Every state and territory moved higher over the month, with NSW the biggest gainer out of the large states and Tasmania the biggest gainer out of all the smaller regions.
August 2024 E.L Engineering Index
August 2024 E.L Engineering Index: 263
Same period last year (August 2023): 309
Percentage change over last month: 3%
Engineering recorded a 3 per cent decrease compared with the prior month, flattening its recent trend.
The Engineering index is now in the middle of its recent trading range, meaning that in general terms 2023 was generally lower but 2024 has been basically flat.
Although the business sector was lower during the month, gains in the government sector were enough to push the monthly result into positive territory.
August 2024 E.L Management Index
August 2024 E.L Management Index: 819
Same period last year (August 2023): 957
Percentage change over last month: 14%
The Management sector gained a strong 14 per cent in August compared with the prior month.
The result comes after two months of losses, but with the 14 per cent gain this index is back near the middle of its 2024 trading range.
Government sector ads in print media contributed positively to the overall result, as did business sector print media offers.
In August, gains across most states and territories were partially offset by a loss in the ACT.
August 2024 E.L Information Technology Index
August 2024 E.L Information Technology Index: 233
Same period last year (August 2023): 296
Percentage change over last month: 16%
Information Technology rose 16 per cent in August.
Like all the sectors in August, government jobs growth contributed far more than is usually the case.
While the large states of NSW and Queensland were actually lower for the month, these losses were offset by significant gains in many of the other regions like Victoria, Western Australia and the ACT.
Web advertising – the majority of demand – was higher in both the business and government sectors.
August 2024 E.L Marketing Index
August 2024 E.L Marketing Index: 526
Same period last year (August 2023): 496
Percentage change over last month: 5%
The Marketing index is the only index to put together two positive results, gaining 1 per cent in July and then 5 per cent in August.
The index seems to remain within its recent trading range that was begun in 2022.
Amid the states and regions, gains in Queensland and Victoria were enough to counteract significant losses in ACT and Western Australia.
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 papers in each state. National papers are not used to avoid “doubling up”. Internet data is not collected off the websites 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 for 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.
