A range of new data released by the ABS suggests a relatively stable Australian economy entering 2019, with unemployment fairly steady, although the number of trading businesses has grown strongly.
According to the Australian Bureau of Statistics (ABS), trend unemployment remained steady at 5.1 per cent in January, with the December 2018 figure being revised up from 5.0 per cent — a level which the ABS said at that time was the lowest in eight years.
“The unemployment rate has remained at 5.1 per cent for a second month, supported by strong participation in the labour force, at 65.7 per cent,” said ABS chief economist Bruce Hockman.
January saw an increase of 24,900 people in employment, around two-thirds (16,800) of which were full-time positions.
The trend employment to population ratio, however, looks much brighter, hitting a decade high of 62.4 per cent.
“The 15–64-year-old employment to population ratio reached a historical high of 74.1 per cent, with almost three of every four ‘working age’ Australians now employed,” Mr Hockman said.
At a state level, trend unemployment fell in NSW and Queensland but rose in Tasmania, SA and WA. Victoria and both territories were stable.
The employment figures include Australians working even just one hour per week, of which there are more than 12,000, and are separate from the rate of underemployment, which is considerably higher.
Surge in number of businesses
The total number of businesses operating in Australia has risen for five consecutive years now, according to the ABS.
As of June 2018, there were 2.3 million actively trading businesses — up by 3.4 per cent on a year earlier.
Business volumes increased in every state and territory, although it was Victoria that recorded the fastest growth rate in the number of businesses in operation.
However, while more businesses are entering the economy, more are also exiting too.
Director of the Business Register Unit, Luisa Ryan, said that the entry rate of businesses into the national economy rose to 15.8 per cent in June 2018 (up from 15.1 per cent a year earlier), while the exit rate also increased over the year (to 12.5 per cent, from 12.0 per cent).
Businesses operating in the transport, postal and warehousing sector recorded the strongest influx of new operators, surging by 16.8 per cent or 25,247 businesses, the data showed. The ABS noted that the sector has seen consistent growth since 2015 when new rules were introduced forcing ride-sharing drivers to register as businesses.
The construction sector continues to account for the largest total number of businesses by industry.
At the other end of the spectrum, the volume of operators in agriculture, forestry and fishing fell by 0.9 of a percentage point (or 1,634 fewer businesses), led by an 11 per cent plunge in forestry.
Wage growth still below average
With inflation currently sitting at just 1.8 per cent, according to the Reserve Bank — below its target band of 2 to 3 per cent — it is perhaps unsurprising that wage growth is continuing to underperform its historical average.
Average total weekly earnings (including penalty rates, overtime and bonuses) for full-time workers was $1,666.20 in November 2018, the ABS confirmed this week. That is a 2.2 per cent rise on the same time last year.
Average ordinary time earnings increased by slightly bigger 2.4 per cent, to $1,604.90.
Public sector wages continued to perform more strongly than the private sector — 2.6 per cent versus 2.3 per cent, respectively.
“This latest data points to ongoing low growth in average earnings, with the annual increase in line with the Wage Price Index data released yesterday. The growth of 1.2 per cent for the last six months is the same as it was at May 2018,” Mr Hockman said.
“Over the year, average weekly ordinary time earnings for full-time adults in the private sector increased by 2.3 per cent and public sector by 2.6 per cent, with the average earnings in the public sector remaining higher than in the private sector.”
The Fair Work Commission recently suggested that there is “no definitive explanation” for why Australian wages are tracking well below their historical average growth rate of 3.2 per cent.
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