Finance, construction, real estate and retail jobs most likely to be hit in 2019 as house prices fall – ABC News (Australian Broadcasting Corporation)
Finance, construction, real estate and retail jobs most likely to be hit in 2019 as house prices fall
Weaker house prices and the fallout from the banking royal commission will mean 2019 will be a weak year for jobs in the finance, construction, real estate and retail sectors, economists have warned.
New job advertisement data indicates the banking royal commission may have already curtailed career opportunities in financial services.
The Sunsuper Australian Job Index measures and tracks digital job advertisements across more than 4,000 sources.
It said financial and insurance services was the weakest performing industry of 2018, with demand falling 9.6 per cent year-on-year.
Commissioner Kenneth Hayne will hand down his final report next month, which business chief executives and directors fear could spark a wave of tighter regulations.
Sunsuper’s chief economist, Brian Parker, said the fallout from the royal commission would continue to impact employment demand and career opportunities in the sector.
“The only comfort from these results is that demand started to stabilise in the last quarter of 2018, growing 1.6 per cent, suggesting that the worst may be over and some rebuilding may occur in the year ahead.”
Why there may be fewer jobs in banking
Job website Indeed’s Asia-Pacific economist Callam Pickering predicts employment prospects in the finance sector will be dim this year.
“I don’t think it will be a strong year for finance employment,” he said.
“I expect finance jobs to be weak in 2019 partly owing to the royal commission and partly due to weaker house prices.”
He said the banks would bear the pain of most of the declines in job opportunities.
“It is mostly from the banking side, given where business is at, and given what’s happened with property prices,” Mr Pickering said.
“The banks are likely to do fewer mortgage loans and that will flow through to [lower] demand for new workers.”
Falling house prices to hit other sectors
Mr Pickering said a weaker property market will also hit other sectors including construction, real estate and retail.
He said Australia’s faith in the property market was shaken in 2018, with falling prices in Sydney and Melbourne expected to continue this year.
In a research report released last week, Fitch Ratings forecast Australian house prices would decline a further 5 per cent this year, on top of a 6.7 per cent decline from the peak so far, making Australian housing the worst performer out of 24 countries for the second consecutive year.
It follows CoreLogic’s December figures showing Australian house prices had experienced the sharpest drop since the global financial crisis and would continue to trend lower.
“The fallout from the royal commission looking into misconduct in banking and financial services, along with softer investor demand, and subdued wage growth, point toward further falls in the year ahead,” Mr Pickering said.
He added that residential construction had already started contracting and real estate employment may decline as sales and commissions drop.
Retailers were already facing intense competition from the likes of Amazon.
“Soft wage growth for most households isn’t doing the sector any favours,” he said.
“A drop in household wealth is the last thing retailers need right now.”
Employment data takes a while to catch up
Mr Pickering has also done his own analysis of job postings data and said it showed results consistent with Sunsuper’s — finance job ads are taking a hit.
He said the jobs advertisements data was inconsistent with official employment figures for finance and insurance services, which showed the sector performed better last year than it did in 2017 and 2016.
Mr Pickering said there were numerous reasons for the discrepancy.
“Not every job that’s advertised will be filled and not every job that’s filled will be advertised,” he said.
“So there can be noise around job posting measures compared with employment measures.
“Some of what Sunsuper might be seeing in data now is something that has not happened to employment yet, it may have not flowed through to the actual employment data.”
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