Last November, we had a fascinating discussion about the then-impending recession’s effects on the LP readership community.
Six months on, the macroscale picture in Australia is not great, but not as calamitous as it might have been either. Despite a marginal drop in unemployment in April, the trendlines continue to show increasing unemployment at around 5.5%. The latest GDP figures on the ABS website show slightly negative growth in the December quarter. However, Australia’s banks continue to be sound, exports are holding up (indeed, we’ve had substantial trade surpluses for the last quarter), and mortgage default rates remain very low.
But back to the micro-scale. Since the last piece, I did have one very stark piece of evidence on the global downturn through my job. I tried to organize a workshop in my particular field of academic expertise, attached to a broader software quality conference in Asia. We’d done this a couple of times before, and got more than enough good submissions to run a successful workshop. This year, we got a grand total of two submissions, of which one was from a colleague at Swinburne.
Apparently, though, we’re not the only ones. The main conference submissions were down very substantially, and my co-organizers report similar drop-offs at software engineering conferences around the world. Frankly, it’s surprising how strong the effect has been, given that most of the attendees are academics, whose funding is either from governments and/or in multi-year grants.
So what about you?
Nevertheless, hand up anyone who thinks this makes Viscount Turnbull look a bit silly.
http://www.theaustralian.news.com.au/story/0,25197,25442509-5013871,00.html
As a PhD candidate with an APA, I can safely say this recession has made me better off than I was before, to the tune of $1850 cash. Not to mention all the great ‘recession buster’ deals out there.
It’s made me $1400 dollars better off and I still have a pension rise and a PLR payment to come.
Has also afforded me much entertainment watching the Libs tie themselves in knots. Malcolm on the 7.30 Report has become a real comedy spot.
Robert,
I’ve got a couple of friends in the concreting industry who have been laid off but both have found other jobs. One friend in banking who has been laid off and can’t find a job and one in Dubai who expects here (construction) job to go sometime this year. Other than those experiences, everything is pretty rosy. There has been a marked reduction in new mineral exploration and mine expansions (my field of work) but the overall employment figures in these industries has remained pretty static.
Other than that, I haven’t noticed a thing – My wife’s business is actually growing and they have put on staff in the last month. Cafe’s and restaurant’s still seem pretty busy in Newcastle and the Hunter and the Jet’s are doing OK in the Asian League as are the Knights in the ARL so the people seem to be pretty happy as well.
Anecdotally, acquaintances in insolvency law tell me that business and residential defaults are likely to increase significantly in the near future.
PB
I think it was yesterday or the day before that the retail figures were up for March and people were (wishfully) speculating that we might avoid the second quarter of negative growth. That would be the icing on the cake, but these unemployment numbers are certainly fun for anyone enjoying the Liberal sideshow. They just can’t get any luck.
As for personal experiences, some people were laid off at my mum’s work, an engineering firm. Although she was a little bit nervous on the day, she’s fairly senior and works a lot of extra hours so i don’t think it should be too much of a problem. Also i play in a band and our space that we rent as a rehearsal space is up for sale. It used to be a food place serving an industrial area, a lot of warehouses and mechanics. There have been a few people to inspect but no takers in about 6 months.
Also one of the band members went to the auction of a place similar in size and in the same area. Aside from him, his girlfriend and his father, there was only one other person not from the real estate agent. Suffice to say the property was not sold.
Oh yeah, all my friends are looking forward to having wads of government cash to spend in the middle of a recession.
Katz,
which in turn is good news for the insolvency industry
thewetmale@6,
There are a few empty shops in the arcades in Armidale, especially K-Mart Arcade, but that might be because Coles and Woolies just recently built a super arcade each, probably in the hope the uni student population here might grow. I do hear tell things aren’t good out at the uni and several departments in the humanities/maths might be in trouble because the powers that be have decided to diverge into sports admin departments and the like with the Government’s new funding guidelines, but nothing official. (I only go out there once year with about $100 to photocopy academic articles.So I’m very out of the loop.)
I work by the hour in Darwin.
No shortage of work at good rates which are not under any pressure.
Casuarina Mall is frantic with people buying stuff.
One fellow from the work agency I use came up from Perth and got the last bed in four managed apartment complexes that we rang. Accommodation is very tight everywhere with some places saying they are booked out for months. *slight skepticism insert here*
Did I mention that temps here will stabilise at about 30c for the next four months?
There’s bugger all admin temping work in Melbourne at the moment, which is unusual. Presumably government departments and businesses are avoiding hiring temps so that they can keep on their permanent staff.
Weeellll in our Parents Group, everyone who wants to work is pulling in a wage. The ironworker took advantage of the Hot weather in Jan and gave his employees an extra weeks holidays. The nanotech engineer is getting home before seven these days, the physical rehab therepist is knocking back work. The serial employee seems to be sticking at his current position and claims to be enjoying it. The phone store manager would rather be DJing, but aknowledges that there is not enough work in that field right now. the homewares couple have just moved to bigger premises. everyone else is either cruizin in their positions or knocking back extra work. The big exception is the two bankers, both of whom have taken huge paycuts but so faar kept their jobs.
Out of nine couples we have two full time parents, plus two on maternity leave due to new babies, there are two more mums entering their last trimester this week and next week and one more keen, two if you count the software engineer who had her second 6 months ago and wants another.
In our patch of the woods, the edge of zone 1 in SE melbourne, there is definatly a baby boom on and house prices have continued to rise, there are no extra empty shops, there are at least three new cafes adn the bowling club has recently, well in the last 8 months, started presenting some top bands.
Architect brother-in-law has had the sack and I’m told they are the canaries in the mine of the building industry. Another BIL-to-be has lost his managerial position in a jobs broking company, which seems a bit surprising. No one else that I know of out of work.
Have a couple of friends who have lost jobs and found it hard to replace them. The solution was to go for lower skilled work, hospitality and retail.
So they received a salary reduction and lower job satisfaction, whilst no doubt pushing other potential retail and hospitality workers down the scale of employment and towards unemployment.
And Crowns st, Surry Hills, has had a noticeable increase of empty boutique shopfronts.
Work is unaffected. I don’t know anybody who has lost their job. Rudd didn’t give me a handout, but no reason he should either. All in all, the GFC has been a complete non-event so far.
Friends of mine in the media industry are doing it quite tough – glossy mag adverts are way down, journos are getting sacked at all the big papers and the nebulous “branding” deals are drying up. On the other hand, as a writer I’ve never been this busy, and as a juniour academic I’m trying to publish as much as I can as quickly as I can so I can get a job when the predicted demographic crunch finally hits the Australian university system
We spent some of our money from Kev on building supplies and I was having a yak with a couple of the companies here on the lower Murray and asked how things were going.
So-so was the general response.
Not because of the GFC but because there has been a noticeable decline [unseasonal] in tourism and recreation [paricularly the latter] along the Murray because of the demise of the backwaters and the difficulty of access to caravan parks, boat ramps, camping facilities and the like, even some of the shops have been effected. Less canoeists, fishers, river boat trade.
And the shack owners are not spending on improvements as per usual cos their resale has been hit as many of them no longer have the all important water frontage.
GWC [global warming crisis] needs attention too, from an economic perspective.
Rely on casual teaching work, way down on normal years. Fellow casual teachers report same.
Theorise that the 55 year olds who would normally be leaving because of super aren’t, that schools are tightening budgets and people aren’t taking sick leave.
A friend in a big law firm in Sydney told me they’ve been doing fine up to now (“there’s a lag with us, all the insolvency and workplace law ramps up at the start of a recession”) but expects the work to begin dwindling soon.
My brother (a builder) lost his job as the company closed – all their previously booked work for the next two years disappeared.
But he’s now working for himself, doing word-of-mouth small renovations, and actually earning more than previously, so its worked out quite well!
The only friend to have actually been made redundant used to work at Babcock and Brown, and clearly the writing was on the wall there!
Another friend is trying to find a new position, but there isn’t much around.
Well there are 100 fewer software engineering jobs in Melbourne than there were in March. That includes mine. Our troubled multi-national parent continued the retreat into its domestic “La la la I can’t hear you” womb, and our timid outpost was one of the main casualties.
I thought I’d go through the Centrelink process just for black amusement of it and apparently my waiting period for dole payments is 180 weeks. Seriously. That’s before any asset tests. So naturally I didn’t bother to go through with the claim – therefore I don’t count as being unemployed.
There’s the trick – apparently you can’t be officially unemployed until you apply to get money from the government that they will never give you – now that’s a convenient hurdle. This has obviously changed since 2004 when I simply registered despite not applying for a benefit.
Craig
that’s not my understanding on how unemployed stats are worked out – it’s a survey of households, I believe.
None of the elderly dogwalkers on my beach look suicidal and the latte drinkers among them are still having breakfast most days so their pooches can have their bacon titbits. Pensioners have appreciated and many spent their recent cash handouts and are looking forward to the real income increase which seems about to arrive. Some of us have lost money in our superannuation funds, but still much less than the phenomenal gains of the previous few years. A lot depended on how quickly one moved away from previously high earning and now horribly high loss equities. I moved to capital guarunteed and was willing to wait out the crisis earning nothing, so I was pleasantly surpised to find I had modest earnings which in a few years will make up for the crisis shortfall, even if I don’t shift again to cash which has had even better returns. Many of today’s superannuants can still draw down unchanged super allowances without real capital loss and look forward again to growth albeit at a less heady rate than a few years ago. Except, of course, for those caught up in the Costello-Howard pied piper dream of tax-free superannuation riches and borrowed millions against their vastly over-valued homes to meet the deadline for unlimited super investment. I wonder how many of this group are represented in the bad debts causing grief to banks and the unmovable stocks of the more expensive homes for sale.
Meanwhile the sun keeps shining here and our major and real anxiety is lack of rain. I have the impression that Turnbull and Hockey haven’t cut through with their gloomy national debt warnings. Recent retail sales and unemployment figures make nonsense of their scaremongering even if they themselves had not come across as hollow and inconsistent in their message.
“therefore I don’t count as being unemployed.”
This is incorrect. Unemployment is measured by the ABS in the labour force survey when they ask people if they have a job. It is not measured by the number of people registered at Centrelink. This has been the case since 1978.
I do office catering, which has been cut back a lot – office functions are one of the first things companies cut back on in harder times.
However, that just means my business moves up a level, from the office drones to the managers, because they haven’t cut back a bit. My most surreal experience so far was talking to some guys in rather expensive suits while they sampled food for a $30 a head function during which 40 middle and senior managers would discuss… cost-cutting.
I got the contract, but only after they asked for more food and upped it to $35 a head.
There’s still plenty of money floating around, but it’s rising up not trickling down.
Sam: Thanks for the correction, but I’m puzzled as to why they estimate it with a poll, when they have hard numbers from Centrelink available. I guess because that only counts the “seeking employment” sector, and they need a wider picture.
Craig Mc
Many unemployed people do not go to Centrelink to register as unemployed because the know that they will not qualify for any benefits. Think of the example of a person who loses their job but their spouse is employed and earns well over the means test cut off. Measuring unemployment using centrelink data would be very misleading. On top of that, one can continue to receive benefits while having a job as long as one’s earnings remain below a particular threshold.
The Labour Force Survey asks people if they are working or not, and if not, whether they are looking for work and available to start shortly if offered a position. Someone is only counted as unemployed if they have not worked at all during the survey period but were actively looking for work and ready to start work.
Robert, don’t get too excited about the trade data. Once the bulk commodity contracts are written down this year, export earnings will fall off quickly, even though volumes should hold up okay. Also, some of the improvment in the trade balance is due to large falls in imports. That is suggestive of quite weak domestic demand and hence not a good sign for the economy going forward. As I implied on the other thread, Australia’s recession is likely to be shallower than most other major economies, and probably milder than during the early 1990s, but there is still a lot of pain to come for many people unfortunately.
I’ll just write some notes on the ABS labour surveys, since people are probably interested about what is asked. I’ve been part of the survey for 6 months (the last call should come tonight…within an hour).
They choose a household apparently entirely at random by knocking on the door, or leaving a card if no-one is there. This I guess is to avoid undersampling groups without phones, or whom aren’t on any list like the electoral roll/medicare or any other list of people the government has.
They ask if you are studying full time.
They ask about the past week for everyone in the household, and only that week. If you have a casual job, but just didn’t get hours that week, you’ll be considered unemployed. This is common statistical practice since in a large enough sample the randomness of something like that will be cancelled out by people getting one day of work, say at a festival. It ends up being more accurate than asking people what they work on average if their hours vary.
They do ask if you worked more or less than usual though, and the reasons why, so that holidays etc. don’t skew the results.
They also ask the days you worked (I think this may be to make sure you get the hours right by thinking about each day seperately).
They also distinguish between wage, salary and self/family employment.
They ask if you want more hours than you are getting. It interests me that they don’t use this to make more measures of underemployment, but I think there would be large methodological problems here.
Since my household has been employed the entire period, I don’t know if they ask if you haven’t worked and if it wasn’t due to holidays, but they obviously must ask about whether you are looking for work so they can get the participation rate. This is essential for the unemployment measure.
I work in manufacturing in Adelaide and the situation here is pretty catastrophic. They listed a fall in unemployment in SA and I just have to shake my head at that- Holden’s decision to lose a shift caused a huge shakeup of component makers. Makes me wonder….
Brent et al
the “trend line” still shows upward movement in unemployment.
it had to happen, i say these nice things and then go shopping and the Gas appliance store has closed. it was our only appliance store. we still have three kidies clothes stores that specialise in christening clobber.
Labor Outsider wrote:
True, but AFAIK most of the contracts are still in negotiation, so we’re still getting boom prices for our dirt, and the miners did very well out of the low dollar during the December and March quarters. We won’t see the effect of lower commodity prices in the trade data until the September quarter results are released in November.
Volumes may be recovering now, but Asian trade fell in a hole between September and March (see Brad Setser’s blog) hitting Japan and Korea particularly hard, two of our biggest customers.
Personally I’m completely screwed. The AUD is rallying on green shoots fever, and my customers in North America and Europe are sitting on their wallets. Really, exporting is a mug’s game in this country. We’re destined to become a quarry for Asia.
As others have observed, walking the streets and malls, its busy, busy, busy, and its hard to believe there’s a recession at all. I still think this is because we’re 12 months behing the cycle in Oz, and the economy has been given a pre-emptive boost by the govt and RBA before it really needed it.
Lets see how we’re travelling 9-12 months from now when lower commodity prices have flowed through to the real economy, and the govt is winding back the stimulus.
In my bit of TAFE I don’t think we’ve seen increased demand yet. The vast majority of students have been highly motivated through the good times, though we have a class of pre-apprenticeship English support tradies (ie, literacy too low to start their course) who are worrying their teacher with their bad attitude. We’re used to low achievers pretending not to care and deal with it; this is much worse.
I know one man made redundant in manufacturing who was offered a job in a fortnight, but was waiting to hear back from a second interview because that is closer to home. Another man was made redundant from a place that went bust — he’s finishing off some accountancy courses before he gets another job.
Another friend works for the ABS, and yes, the method of giving redundancies there has been really offensive. They’re focussing on higher levels, so my friend’s job is safe.
I’m out of work (company made redundancies early in the year) but am doing a degree so not worrying too much at the moment about work prospects. My partner’s business (personal services) is still doing fine, though some customers did cut back as their own incomes dropped (they in turn being self-employed.)
We are looking to move house and have been coming across mortgagee sales, which is unusual in our area. A recent on-site auction had zero bidders! House prices are uneven – some definitely fallen, others still high.
A friend who is a self-employed graphic artist has no work lined up, for the first time ever.
Though my work is relatively unaffected, the NGOs and charities I have contact with report a severe slackening off in donations and difficulty fundraising over the last several months, which is affecting their ability to provide services and plan for the future.
They’re not sure whether to chalk that up to real or perceived economic hardship amongst donors—probably both.
“Another friend works for the ABS, and yes, the method of giving redundancies there has been really offensive.”
Bastards! they treat people like numbers.
and I hear they treat numbers like numbers too. Bastards!!
ABs = Australian Bastards.
Joe2, your joke indicates that you are fit to live chez Chook. You will never find a more wretched hive of puns and villainy. BYO tent.
Thanks Chookie we are on the way. Home made eggs for brekky, yum.
A friend lost her job because of a restructuring that probably wasn’t GFC related, but has been unable to find anyone who will even give her an interview, despite a fairly broad CV, and rave reviews from some past employers. On the other hand, someone who is studying and thought she’d have no chance of getting part time work got something pretty quickly.
A couple of months ago I floated the possibility of creating a part time position. It’s a bit unusual and I wasn’t sure if anyone suitable would be keen, but friends passed it on and I got apparently qualified people practically drooling at the idea. I finally advertised a month ago, sent it to all the people who had expressed interest before, and had friends send it to people they knew who might be interested, although I didn’t advertise, even through Centrelink. Not a single application.