Business
EMPLOYMENT conditions outside Australia's booming mining sector are akin to those of a recession, according to new data.
Analysis of quarterly industry data conducted by UBS Investment Research concludes that, outside the mining sector, jobs growth contracted in the past 12 months by 0.2 per cent, the weakest pace in almost 20 years.
In contrast, mining jobs surged by more than 20 per cent in the same period.
UBS economists Scott Haslem and George Tharenou said an industry-specific analysis of jobs numbers showed "jobs growth is worse than already weak overall trend, with jobs contracting outside mining suggesting the two-speed economy has so far resulted in recession-like jobs growth (ex-mining)''.
UBS joined the growing band of major financial houses that believe the Reserve Bank will now act more aggressively on official interest rates.
"Given this recession-like trend of industry jobs, we see the economy as needing more help, and now expect the RBA will cut another 50 basis points (in May and June) to 3.75 per cent following a more dovish tone this week,'' UBS said.
The raw data revealed just how ravaged those trade-exposed sectors of the economy were to the high Australian dollar.
Jobs growth in the accommodation and food services sector, for example, was at negative 7 per cent, the weakest in more than 25 years.
Jobs growth in wholesale trade was off by the same amount, its lowest on record.
Retail trade was similarly poor, while jobs growth in the transport, postal and warehousing sector (negative 8 per cent) was the weakest since the early '90s recession.
UBS noted, however, that it was not nearly as bleak in the resource-rich Queensland and Western Australia, where the benefits of the mining boom were starting to flow through.
It believed a couple of short, sharp rate cuts would help lift the national mood.
"Overall, we still expect rate cuts will support demand and see growth become less two-speed in 2012-13, and hence see jobs growth recover solidly towards 2 per cent over the coming year,'' it said.
More business news
Hundreds of Toyota workers face the sack
EXTRA security guards will be on hand when Toyota gives the marching orders to 350 of its staff at its Altona plant today.
Cranky customers lodge 11,000 complaints
WEBSITE hoping to be the home of the angry and perturbed has gone live to 11,000 complaints in one week.
Have your say
Add your comment on this story