Executive job market continues to haemorrhage.
The steam is coming out of the Australian economy.
Information Technology slumps across the nation.
Demand for Executive Positions in Australia in May 2024
The executive job market is taking water amid economic and governmental pressures, according to the E.L. Executive Demand Index.
The Index fell 7 per cent in April, continuing its decline that began a year ago.
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: “As to be expected, the Index continues to fall amid relatively high interest rates in Australia and the US.
Rising Unemployment
Montgomery said the E.L Index as lead indicator of general employment is now forecasting higher unemployment.
“The measurement of executive employment is significant because it leads general employment.
“People only hire expensive executive employees when they are positive about the future, and they are first to go because employers need to keep their skilled and semi-skilled employees at least until their order book has evaporated.
“So, rising general unemployment is therefore unlikely to occur immediately and inflation and interest rates are expected to remain high for some time to come. This will probably mean interest rates will not fall until March 2025 interest rates will be falling when the Reserve Bank fights a different battle that of a looming recessionary economy.
“The government is now further magnifying this prediction with an inflationary budget with increases in government spending, and the opening of the tap on public sector expansion.
Inflationary Government Spending
“While the Reserve Bank, is now asking for the government to slow down on spending and reduce the impact on aggregate demand, the government is politically committed to offering an open cheque to union demands – regardless of what it means to Australia’s general economic health.
“No one in their right mind believes interest rates will fall or productivity will improve this year.
“Of course, we are not in a vacuum. The US economy is also showing recalcitrance when it comes to bringing inflation down into its target band, leaving mortgage rates there at above 7 per cent.
“While the US inflation and interest rate environment remain high, there is less chance for the Australian interest rate environment to deflate.
“After the US Federal Reserve’s December meeting, financial analysts were expecting six interest rate cuts in 2024, beginning in June. But given that inflation has remained high, and the economy is still going strong, that doesn’t seem to be happening anytime soon.
Among the states, New South Wales, Victoria and Queensland were the worst affected by the fallout.
Western Australia made a modest 2 per cent rise on the back of increased employment in the public sector there.
In the business sectors, the worst affected sector was information technology, which fell by a massive 22 percent. This is unfortunate, as strength in this sector shows that business large and small are thinking about making future productivity initiatives.
Demand was higher in Engineering and Information Technology, with Engineering demand better across both online and offline job advertisements. Losses in the other sectors was moderate.
Call Grant Montgomery on +612 9221 6688 or 0414926688 for further details
April 2024 Statistics
April 2024 National Index
April 2024 National Index: 505
Same period last year (April 2023): 630
Percentage change over last month: -7%
National Summary
The executive job market is taking water amid economic and governmental pressures.
The Index fell 7 per cent in April, continuing its decline that began a year ago.
National Demand for Executives Over Last Seven Years
Despite the monthly loss, the three-monthly trend figure has shown some signs of gains after a significant downturn.
State by State Comparison
Among the states, New South Wales, Victoria and Queensland were the worst affected by the fallout.
Western Australia made a modest 2 per cent rise on the back of increased employment in the public sector there.
Employment Trends for Executive Groups
Demand was higher in Engineering and Information Technology, with Engineering demand better across both online and offline job advertisements. Losses across the other sectors were relatively moderate.
April 2024 E.L Finance Index
April 2024 E.L Finance Index: 744
Same period last year (April 2023): 963
Percentage change over last month: -9%
Financial positions have now seen a consecutive quarter of losses, down 9 per cent in April.
Apart from the significant seasonally-affected December 2023 retraction, the Finance index is at its lowest point since 2021.
The Northern Territory and the ACT were the only regions to move higher – all others were lower.
April 2024 E.L Engineering Index
April 2024 E.L Engineering Index: 258
Same period last year (April 2023): 343
Percentage change over last month: -9%
Engineering recorded a 9 per cent decrease compared with the prior month.
The Engineering index continues its seemingly inexorable slide, having clearly lost ground since its highs since 2022.
Like other sectors, the losses were widespread across the country, particularly the medium-sized states of Western Australia and Queensland.
April 2024 E.L Management Index
April 2024 E.L Management Index: 735
Same period last year (April 2023): 921
Percentage change over last month: -6%
The Management sector fell 6 per cent in April compared with the prior month.
Similarly to the Engineering index, the Management index has shown continuous, but mild, declines over a long period.
In April, losses across most states and territories were partially offset by gains in South Australia and Western Australia.
April 2024 E.L Information Technology Index
April 2024 E.L Information Technology Index: 201
Same period last year (April 2023): 302
Percentage change over last month: -22%
Information Technology was the significant loser of April, dropping 22 per cent.
This is unfortunate, as strength in this sector shows that business large and small are thinking about making future productivity initiatives.
Web advertising – the majority of demand – was significantly lower in both the business and government sectors.
April 2024 E.L Marketing Index
April 2024 E.L Marketing Index: 491
Same period last year (April 2023): 534
Percentage change over last month: -3%
The Marketing index fell 3 per cent in April compared to the prior month, with web-based advertising again falling slightly.
Although it would be easy to interpret the losses in this sector as signs of weakness over the short term, over the long term it has traded in a relatively stable range.
However, anecdotal evidence would seem to suggest that the Marketing sector is specific to industries such as resources and construction.
Amid the states and regions, Victoria and Western Australia moved higher, but the gains were not enough to guarantee a positive overall outcome.
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:
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Employment of management usually precedes the employment of skilled and unskilled workers.
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Employment of engineering executives precedes major capital investment.
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The division between various management sectors gives an indication of which sectors of the economy are experiencing growth or decline.
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Compares month-by-month changes in the public and private sector as well as monitoring government expenditure patterns.
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Makes regional comparisons after allowing for population differences.
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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.
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Core data is collected on an actual expenditure of business and government, not on a respondent’s opinion or confidence level.
