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Jobless rate set to fall as vacancies soar

Australia’s recovery from recession is putting many businesses in a better position to pay their bills and hire more staff.

But the tourism industry continues to suffer in the face of snap COVID-19 lockdowns and border closures.

The unemployment rate looks set for further improvement with job vacancies growing at a solid pace in the three months to November.

The Australian Bureau of Statistics said job vacancies in the November quarter jumped 23.4 per cent to be 12 per cent higher than a year earlier and surpassing the pre-COVID levels seen in February.

ABS head of labour statistics Bjorn Jarvis said this follows the sharp increase reported three months earlier as COVID restrictions continued to be relaxed across Australia.

“This reflected the pace of recovery in labour demand in the second half of the year and labour shortages in some industries,” Mr Jarvis said.

Confirming this continued upswing in demand for workers, the National Skills Commission’s preliminary reading of its monthly vacancy report showed job ads on the internet rose by a further 1.4 per cent in December.

This represented the eighth consecutive monthly increase with ads now standing 11.1 per cent higher than a year earlier.

“Today’s data add to the evidence that the employment recovery should continue into early-2021 at least,” ANZ senior economist Catherine Birch said.

The unemployment rate was 6.8 per cent in November after hitting a 22-year high of 7.5 per cent in June.

In last month’s mid-year budget review, Treasury forecast the jobless rate falling further to 6.25 per cent in the next financial year and to 5.75 per cent in 2022/23.

In a further sign of improving economic conditions, payment times between businesses also declined in many industries last year.

However, there are concerns that this trend could be cut short from the imposition of snap lockdowns.

Research by commercial credit bureau CreditorWatch found 15 out of 19 industry groups reported a reduction in the time it takes to pay their bills.

The most notable improvement was in the agriculture, forestry and fishing sector, which saw payment times halved over the year after a decade of tough times due to the impact of the drought.

CreditorWatch CEO Patrick Coghlan said the reduction in payment times reflects better economic conditions.

“However, lockdowns and border closures at the end of the year due to COVID have the potential to stymie this,” he said on Wednesday.

Australian Tourism Industry Council executive director Simon Westaway said continual border constraints and dented confidence to travel interstate continues to hit tourism and spending.

He said the industry had looked to this summer high season to try to recoup some of the major losses of 2020.

“That scenario is effectively crushed so future support for tourism, including certainty over the continuation of JobKeeper beyond the end of March, is a major priority,” Mr Westaway said.

COVID lockdowns over Christmas in Sydney’s northern beaches, and more recently a weekend lockdown in Greater Brisbane, has also put a dent in consumer confidence to start the new year, a worry for retailers.

The federal hotspot declaration for the northern beaches was revoked on Wednesday.

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