Government Spending Model Fails to Lift Living Standards as Executive Demand Weakens
Australia’s executive labour market is closing out 2025 on a weakening trajectory, with new data showing demand for management-level employees falling across almost all industries and states.
The E.L. Executive Demand Index declined a further 3 per cent in November, reinforcing signs of subdued private-sector momentum as the economy enters 2026.
E.L. Consult Managing Director Grant Montgomery said the deterioration had been expected but was now deepening.
“Last month’s data signalled that the outlook for executive employment was turning sharply negative. November has confirmed the trend,” he said.
“Outside of Engineering, every sector weakened. And even within Engineering, much of the hiring was linked to government contracts, not private-sector investment.”
Government Spending, Productivity Decline and Public-Sector Expansion
Montgomery said government spending was “masking fundamental weaknesses” in the economy rather than strengthening it.
“The current fiscal settings are not delivering productivity or a genuine economic lift. Government outlays, particularly when weighted towards welfare, tend to drive inflation rather than improve the productive base.
“In the past 12 months, public-sector employment has expanded by 179,000 roles, yet service quality has not improved. Much of the added bureaucracy increases regulatory burden, slows business activity and lifts compliance costs.”
He said elevated public-sector hiring was also complicating monetary policy.
“The Reserve Bank is forced to keep interest rates higher for longer to offset demand
pressures created by government spending. Structural issues such as weak productivity growth and over-reliance on resources are simply being deferred.”
Montgomery warned that the rapid growth of public-sector employment was creating political challenges around reform.
“One in five Australian workers is now taxpayer funded. The backlash over modest role reductions in the NSW Department of Transport demonstrates how difficult structural change has become.”
Interest Rate Outlook
He said the RBA “should have considered tightening this month,” particularly as the Federal Reserve has now reduced US rates, but political timing around Christmas meant any interest increase will not happen until at least the first quarter 2026 and “likely be more severe”.
Sector and State Breakdown
Engineering remained the sole bright spot, with South Australia, Western Australia and the Northern Territory all recording gains—likely due to defence-related investment and construction of future nuclear submarine facilities.
However, the major states did not share this fortune, and broader business capital expenditure remains subdued (except in the high-demand electricity infrastructure sector driven by AI-related energy requirements).
At the state level, New South Wales posted a modest uplift fuelled primarily by stronger Marketing executive recruitment. Tasmania and Queensland also finished in positive territory.
All other regions declined, with Victoria sliding further and South Australia and Western Australia joining the downturn due to falls in Finance, Management and Marketing roles.
Call Grant Montgomery on +612 9221 6688 or 0414926688 for further details
November 2025 Statistics
November 2025 National Index
November 2025 National Index: 467
Same period last year (November 2024): 482
Percentage change over last month: -3%
National Summary
Australian executive demand is ending the year on a negative trend, highlighting the lack of oomph behind in the Australian economy as it enters 2026.
The E.L Index fell 3 per cent in November with most job sectors, states and territories on the decline. As was predicted in the last E.L. Index report we are in for a rough ride and all sectors except for Engineering were soft.
It is not anticipated that things will improve regardless of government Keynesian-style pump-priming.
National Demand for Executives Over Last Seven Years
The executive demand long-term trend continues to prevaricate, unable to make any progress for the year
State
New South Wales eked out a small uptick largely off the back of higher Marketing recruitment, joined by Tasmania and Queensland.
All other regions were negative, with Victoria continuing to slip, joined this month by South Australia and Western Australia due to losses in Finance, Management and Marketing.
Executive Groups
Engineering was the exception to the general retraction, with South Australia, Western Australia and the Northern Territory all rising; no doubt bolstered through government defence spending on future facilities for the nuclear submarines.
The big states were not so positive though slightly supported by private sector spending on Data Centre and electrical construction works to support the AI wave.
November 2025 E.L Finance Index
November 2025 E.L Finance Index: 747
Same period last year (November 2024): 727
Percentage change over last month: -4%
The Financial index cancelled out all its October increase with a 4 per cent fall in November, continuing to slip.
Five out of the seven states and territories fell during the month, with only New South Wales and Queensland ending the month in the black. The ACT was the biggest loser.
In contrast to the previous month, the business sector was the mainstay of the market, with government sector demand down.
Novemebr 2025 E.L Engineering Index
November 2025 E.L Engineering Index: 231
Same period last year (November 2024): 260
Percentage change over last month: 3%
Engineering led the way in November, recording another slim positive result – this time a 3 per cent uptick.
Again, results were also different across the country, indicating that one-off projects or programs are driving employment rather than general economic strength. South Australia, Western Australia and the Northern Territory all rose, bolstered through government defense associated with spending on future facilities for the nuclear submarines.
The big states were not so lucky and capital expenditure by the business sector continues to be down (although a notable exception was higher settlement Data Centre expansion linked to AI requirements). The ABS has noted that many large infrastructure programs are coming to an end.
November 2025 E.L Management Index
November 2025 E.L Management Index: 617
Same period last year (November 2024): 706
Percentage change over last month: -5%
Management was another example of the general malaise in employment, seemingly jumping into the Christmas/ summer holiday period early. The Index fell 5 per cent in November.
Significantly, as was the case the prior month, the larger states of New South Wales and Victoria that provide the majority of Management positions provided the most ballast to the overall result, falling 3 and 10 per cent respectively.
The only large state to provide some positive impetus was Queensland, benefiting from gains in the print and web-based business sector.
November 2025 E.L Information Technology Index
November 2025 E.L Information Technology Index: 152
Same period last year (November 2024): 234
Percentage change over last month: -3%
After a full quarter of gains, Information Technology resumed its downward path by registering a 3 per cent loss in November compared to the prior month.
However, recent performances have improved for the sector – not recovering from the prodigious losses in the first half of 2025, but at least stemming the tide and stabilizing.
As was the case with most of the sectors in November, performances were region-specific. While New South Wales and Victoria were stronger, Queensland and South Australia were relatively weak.
November 2025 E.L Marketing Index
November 2025 E.L Marketing Index: 534
Same period last year (November 2024): 412
Percentage change over last month: -3%
The bifurcation of the Index across the country was visible in Marketing, as New South Wales and the Northern Territory made relatively strong movements higher while all other regions were lower. It registered an overall 3 per cent loss in November.
Despite the loss, the Marketing index continues to slowly move higher on a longer-term basis – the only sector to do so. It has retained the significant gains made in January 2025 which would normally be pointed at as an anomaly.
New South Wales was again the best large state, offsetting losses in most other regions during the month.
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.
