After a very strong employment growth figure in February, employment growth in March 2024 returned to more normal levels. In trend terms, the unemployment rate remained stable at 3.9 per cent for the fifth month in a row, while in seasonally adjusted terms, unemployment increased by 0.1 percentage point to 3.8 per cent, which is where the rate sat in October 2023.

Taken together, what this means is that while employment growth has been strong, it has really kept pace with population growth throughout the last few months. Pent up demand for labour in areas such as healthcare (particularly NDIS related jobs) as well as education and construction has contributed to good jobs growth, and the labour market has absorbed the additional labour supply that migrants have provided at a steady pace.

The number of unemployed people has increased by 11.2 per cent over the year to March 2024, which is a much higher rate than the increase in employment, which has grown by 2.4 per cent over the same time period – roughly the same rate as population growth, which was 2.5 per cent over the year to September 2023. What this tells us is that there is some softening in labour force conditions, although it can be considered very minor, and the market is still tight by historic standards.

CreditorWatch’s Business Risk Index (BRI) data for March 2024, points to continued softening in business trading conditions, particularly among small and medium sized businesses. Average values of invoices are trending down, while trade payment defaults are trending up. This means that business activity is slowing, and cash flow problems are increasing.

We expect continued softening in the labour market over the course of 2024, as businesses tighten strings where they can while interest rates remain high and consumer demand remains very subdued.