The Australian’s Friday front page was emailed out earlier tonight, and it reports “Jobless rate at lowest in seven years.” This may be the case for Australia, but it’s not so for Queensland, where the unemployment rate is stuck around 6%, as it has been for a few years now (see chart below). Seven years ago the state unemployment rate was 5.5%. So, while the Australian unemployment rate is back around to what it was seven years ago, Queensland’s is ½ percentage point higher. That corresponds to around 15,000 more unemployed people in Queensland than we would have if we’d returned to the 2011-12 unemployment rate. As I’ve noted before, the Queensland economy is under-performing relative to the southern states.
With a 6.1% unemployment rate, Queensland is tied with WA in terms of having the highest unemployment rate among states and territories (see chart below). NSW has an unemployment rate of 4.5% and Victoria has a rate of 4.7%.
While Queensland experienced strong jobs growth in 2017, since then jobs growth has fallen substantially (see chart below).
Note that many of the new jobs that have been created in recent years have gone to new entrants or re-entrants to the labour market, rather than to the unemployed. The number of unemployed Queenslanders has remained relatively stable (see chart below).
We need to see much stronger employment growth in Queensland than over the last 12 months if we are going to see a material reduction in the state unemployment rate. Consider that Queensland’s 15+ population is increasing by around 70,000 persons each year (see chart below). The employment-to-population ratio is around 62%, meaning the Queensland economy needs to support more than 43,000 additional employed persons each year. Over the 12 months to September, employment increased in Queensland by just over 39,000, so it was several thousand short of the minimum required to stabilise the unemployment rate. So it’s unsurprising that, as Queensland Treasury noted in its latest labour force briefing, the state’s trend unemployment rate was “marginally higher over the year”, at 6.1% compared with 6.0% in September 2017.