Labour Market Conditions in Regional WA

Labour market conditions in regional WA

Mid West and Gascoyne Employment Service Area
Midlands/Wheatbelt Employment Service Area

13 March 2015

Ivan Neville

Assistant Secretary, Labour Market Research and Analysis Branch

2 - WA labour market: employment up, but so is unemployment

Over the year to February 2015:

•Employment has increased by 38,400 (or 2.9 per cent)

•Unemployment has risen by 5,800 (or 7.4 per cent)

•The unemployment rate stands at 5.8 per cent, up from 5.5 per cent a year ago

•The participation rate has increased, by 0.6 percentage points over the year, to stand at 69.0 per cent

Notes

Source: ABS, Labour Force, Australia, February 2015 (cat. no. 6202.0), seasonally adjusted

Labour market conditions in Western Australia remain sound, although there are signs it has softened somewhat over the last year.

While employment has increased over the 12 months to February 2015, by 38,400 (or 2.9 per cent), the unemployment rate has also edged up, from 5.5 per cent to 5.8 per cent. It is important to note, however, that the participation rate has also risen over this period, by 0.6 percentage points, to stand at 69.0 per cent, well above the national average (or 64.6 per cent).

3 - The full impact of falling commodity prices may yet to be felt

Notes

Source: Reserve Bank of Australia, Index of Commodity Prices, February 2015 (SDR terms)

As at February 2015, the Reserve Bank of Australia’s Index of Commodity Prices was 42 per cent below its July 2011 peak. Employment in mining in Western Australia has also fallen by 12 per cent from its peak in the February quarter 2013.

4 - Map of the regions

Notes

The Mid West and Gascoyne Employment Service Area (ESA) comprises 20 Local Government Areas (LGAs):

Carnamah
Carnarvon
Chapman Valley
Coorow
Cue
Exmouth
Greater Geraldton
Irwin
Meekatharra
Mingenew
Morawa
Mount Magnet
Murchison
Northampton
Perenjori
Sandstone
Shark Bay
Three Springs
Upper Gascoyne
Yalgoo

The Midlands/Wheatbelt ESA comprises 28 LGAs:

Beverley
Bruce Rock
Chittering
Cunderdin
Dalwallinu
Dandaragan
Dowerin
Gingin
Goomalling
Kellerberrin
Koorda
Merredin
Moora
Mount Marshall
Mukinbudin
Narembeen
Northam
Nungarin
Quairading
Tammin
Toodyay
Trayning
Victoria Plains
Westonia
Wongan-Ballidu
Wyalkatchem
Yilgarn
York

5 - Regional profile

Adult (15+) population (2013) / Unemployment rate / Indigenous
(% adult population)
Sep-14 / Annual change
Mid West and Gascoyne ESA / 52,700 / 7.2% / 0.6% pts / 9%
-Greater Geraldton / 31,600 / 6.6% / 0.3% pts / 8%
-Carnarvon / 4,800 / 12.8% / 2.4% pts / 17%
Midlands/Wheatbelt ESA / 45,500 / 4.0% / -0.6% pts / 4%
-Northam / 9,300 / 6.1% / -1.3% pts / 4%
Western Australia / 2,037,000 / 5.8%* / 0.2% pts / 3%
Australia / 18,763,200 / 6.3%* / 0.3% pts / 2%

* Seasonally adjusted data for February 2015 (cat. no. 6202.0)

Notes

Source: ABS, Population by Age and Sex, Regions of Australia, 2013 (cat. no. 3235.0); Department of Employment, Small Area Labour Markets, September 2014; ABS, Census of Population and Housing, 2011

Labour market conditions appear to be softer in the Mid West and Gascoyne ESA than in the Midlands/Wheatbelt ESA. The unemployment rate in Mid West and Gascoyne has risen by 0.6 percentage points over the year to stand at 7.2 per cent in the September quarter 2014 (latest available data). The unemployment rate in the Midlands/Wheatbelt ESA, on the other hand, fell by 0.6 percentage points over the same period, to stand at 4.0 per cent in the September quarter 2014.

The Mid West and Gascoyne ESA has a large Indigenous population (9 per cent of persons 15 and older). Within the Mid West and Gascoyne ESA, the LGA of Carnarvon has an Indigenous population that makes up 17 per cent of the adult population.

6 - Employment by industry, 2011

Notes

Source: ABS, Census of Population and Housing, 2011

This chart shows the proportion of employment in key industries for each region. In Mid West and Gascoyne, five industries account for almost half of all employed persons:

Construction;
Retail Trade;
Agriculture, Forestry and Fishing;
Health Care and Social Assistance; and
Mining

Employment in Midlands/Wheatbelt, however, was heavily concentrated in Agriculture, Forestry and Fishing, which comprised 22 per cent of total employment in 2011.

7 - Low population growth compared with other regions

Notes

Source: ABS, Population by Age and Sex, Regions of Australia, 2013 (cat. no. 3235.0)

The chart shows that the Midlands/Wheatbelt and Mid West Gascoyne ESAs have had the slowest rates of adult population (15 and over) growth over the five years to June 2013 of all the Western Australian ESAs.

Furthermore, the proportion of the adult population aged 50 years and older was 49 per cent in Midlands/Wheatbelt, compared with 41 per cent in Mid West and Gascoyne.

8 - Young people leaving the region

Notes

Source: ABS, Census of Population and Housing, 2011

Around 45 per cent of 15-24 year olds who lived in the Midlands/Wheatbelt ESA in 2006 had left by the time of the 2011 Census. The number of 15-24 year olds who moved into the region over this period, however, was less than half the number of those who left.

The chart for Mid West and Gascoyne suggests that a similar phenomenon occurred there, albeit to a lesser extent. Between 2006 and 2011, there appears to have been a large influx of 25-44 year olds to the region, both from within Australia and overseas.

9 - Higher levels of youth disengagement

Notes

Source: ABS, Census of Population and Housing, 2011

Both the Mid West and Gascoyne and Midlands/Wheatbelt regions have an above average proportion of 15-24 year old females who are neither studying or working. Those who are unemployed and are not currently studying are said to be ‘disengaged’ from the workforce.

10 - Below average educational attainment, 25-34 year olds

Year 12 / Change in Year 12 attainment since 2006 / Certificate III/IV level / Diploma/ advanced diploma level
Mid West and Gascoyne / 55% / 4% pts / 27% / 7%
Midlands/ Wheatbelt / 58% / 5% pts / 26% / 6%
Western Australia / 70% / 7% pts / 22% / 9%
Australia / 75% / 6% pts / 20% / 10%

Notes

Source: ABS, Census of Population and Housing, 2011

25-34 year olds in the Mid West and Gascoyne and Midlands/WheatbeltESAs had lower levels of year 12 attainment (55 per cent and 58 per cent respectively) than the Western Australian average (70 per cent).

Furthermore, the proportion of 25-34 year olds who held a Bachelor degree or higher was about half that of the State average (17 per cent each, compared with 31 per cent for Western Australia).

11 - Why is it important?

Notes

Source: ABS, Census of Population and Housing, 2011

This chart shows the positive relationship that exists between educational attainment and labour market outcomes. For 25-34 year olds, those with post-school qualifications (from certificate level III/IV to Bachelor degree and higher) were more likely to be participating in the labour market, and less likely to be unemployed, than those who had below year 12 schooling.

12 - Recruitment conditions in Mid West and Gascoyne have softened

December 2014 / May 2011
Vacancies per 100 staff / 22 / 37
- Greater Geraldton LGA / 18 / 30
- Remainder of Mid West and Gascoyne / 31 / 51
Unfilled vacancies / 1.8% / 8.0%
Difficulty recruiting / 31% / 56%
- Lower skilled occupations / 22% / 56%

Notes

Source: Department of Employment, Survey of Employers’ Recruitment Experiences in the Mid West and Gascoyne ESA, May 2011 and December 2014

While recruitment activity in the Mid West and Gascoyne remains strong, it has softened from the very high levels reported in the May 2011 survey. The December 2014 survey suggests that, compared with 2011, recruitment activity was lower, and unfilled vacancies and recruitment activity were less frequently reported.

13 - Higher skilled recruitment problematic in Midlands/Wheatbelt

November 2014 / May 2009
Vacancies per 100 staff / 17 / 28
Applicants per vacancy / 3.1 / 4.7
Unfilled vacancies / 6.9% / 4.2%
- Higher skilled occupations / 16.4% / 2.2%
Difficulty recruiting / 40% / 39%
- Higher skilled occupations / 62% / 51%

Notes

Source: Department of Employment, Survey of Employers’ Recruitment Experiences in theMidlands/Wheatbelt ESA, May 2009 and November 2014

Overall, recruitment conditions have softened in the Midlands/Wheatbelt ESA since it was last surveyed in May 2009. Despite this, employers were more likely to report difficulty recruiting for higher skilled occupations in the recent survey compared with the 2009 survey. This difficulty is reflected in the large proportion of higher skilled vacancies that were unfilled (16.4 per cent).

14 - Informal recruitment used often - and successfully

Notes

Source: Department of Employment, Survey of Employers’ Recruitment Experiences in the Mid West and Gascoyne ESA, December 2014; Department of Employment, Survey of Employers’ Recruitment Experiences in the Midlands/Wheatbelt ESA, November 2014

Employers that use informal methods of recruitment, including word of mouth or being directly approached by a job seeker, typically received fewer applicants than employers that advertise formally, such as through newspapers and online.

56 per cent of recruiting employers in Midlands/Wheatbelt used only informal methods to recruit, receiving an average of just 1.4 applicants per vacancy. In the Mid West and Gascoyne, 43 per cent of employers used only informal methods, receiving an average of 2.6 applicants per vacancy. Informal recruitment was largely successful in both regions, with very few vacancies remaining unfilled.

15 - Advertising widely may not provide many applicants

Notes

The survey results suggest that using newspaper or online advertisements didn’t always result in a large number of applicants in Midlands/Wheatbelt, with just 10 per cent of employers receiving more than 10 applicants per vacancy.

In the Mid West and Gascoyne, however, where unemployment is higher, some 44 per cent of employers received more than 10 applicants for vacancies advertised in a newspaper or online.

16 - ‘Location’ the most common reason for difficulty

Notes

When asked why it was difficult to fill vacancies, employers from both regions stated that ‘location’ was a factor. As the chart suggests, this was particularly prevalent in the Midlands/Wheatbelt ESA.

17 - Many employers hired non-local applicants

Notes

Around one quarter of recruiting businesses filled a vacancy with someone from outside the local area. This was more likely to be the case in Midlands/Wheatbelt than in Mid West and Gascoyne (33 per cent of recruiting employers, compared with 23 per cent). Employers recruiting for higher skilled vacancies were also more likely to hire a non-local applicant than those recruiting for lower skilled vacancies.

18 - Occupations difficult to fill

Employers had difficulty recruiting for a variety of occupations:

Occupations difficult to fill:
Chefs / Registered Nurses
Motor Mechanics / Structural Steel and Welding Trades Workers
Real Estate Sales Agents / Child Carers
Bar Attendants and Baristas* / Cooks
Housekeepers / Commercial Cleaners
Panelbeaters / Vehicle Painters
Checkout Operators and Office Cashiers*

* - Difficulty mostly in Midlands/Wheatbelt

Notes

The occupations in bold font were considered particularly difficult to recruit for in both regions.

19 - Employers’ recruitment expectations

Recruitment activity is expected to soften in 2015

‘Demand/economy’ greatest concern in both regions
17% of employers in Midlands/Wheatbelt most concerned about recruitment or retention difficulty
Recruitment difficulties in Midlands/Wheatbelt to continue with half of recruiting employers expecting to struggle
Only 12% of employers anticipated increasing staff in next 12 months

Notes

20 - Conclusion

Low population and low population growth
Regional labour market variations with some areas of disadvantage:
High use of informal recruitment methods
Low number of applicants
Challenges ahead:
Worse labour market outcomes in some centres
Mining/Agriculture
Filling higher skilled vacancies
Attracting applicants to the area
Ageing population

21 – Contact information

If you have any questions about the presentation please contact the Employer Surveys Section or Recruitment Analysis Section on:

Tel: 1800 059 439 or

Email:

22 – Further information

Further Information

More information on labour market conditions and other research on small areas can be found on these web sites:

Thank you.

End