Rising workforce participation reflects improved jobs market in Qld

I have been commenting on Queensland’s improving labour market for several months now, and the July labour force data released by the ABS yesterday have confirmed that trend is continuing. The State’s unemployment rate remained stable at 6.3 percent in trend terms, significantly higher than the national average of 5.6 percent, but employment has grown at a faster rate than the national average, at 2.7 percent through-the-year to July in Queensland compared with 2.2 percent nationwide (See Qld Treasury’s brief and Pete Faulkner’s post Qld notches up another positive jobs report).

Queensland’s unemployment rate would be closer to the national average if it were not for the strong recovery in the workforce participation rate over the last year (see figure below). This is actually a good sign of the underlying strength of the labour market, but it means that people previously not looking for work have entered or re-entered the labour market and are competing for jobs with the unemployed. So many new jobs will go to new entrants or re-entrants, instead of to the existing unemployed.


The Queensland Government was quick to note that the July labour force data show “94,500 net new jobs created under Labor’s economic plan”. The extent to which the Government can take credit for this jobs growth is debatable, but it is certainly correct about the increase in employment in Queensland since the last election (see chart below).


That said, as I have noted on this blog before, the bulk of this jobs growth is part-time, with a much smaller increase in full-time positions since the last election (see chart below).


Nick Behrens yesterday commented on the strong growth in part-time jobs and the related problem of under-employment:

The surge of Qld part-time employment continues-July 2017

I expect reasonable employment growth (much of it part-time, though) to continue over the remainder of 2017, due to favourable trends in the tourism, education (particularly international education) and the health, disability and aged cared sectors. Some offsetting loss of jobs will be associated with contracting residential construction activity, now that apartment construction is declining.

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