Labour shortages rise dramatically

289,000 job vacancies as of February 2021 — a 27 per cent rise since February 2020..

The accommodation and food service industries are hungry for lower-paid workers post COVID-19.

April Australian Bureau of Statistics (ABS) employment data shows 289,000 job vacancies in February 2021, up by 61,000 since February 2020 — a 27 per cent rise. ABS head of labour statistics Bjorn Jarvis said the figures reflected the pace of recovery since the second half of 2020 as well as labour shortages in industries such as accommodation and food services where businesses most commonly reported they were struggling to find labour for lower paid jobs.

Business concerns

The release highlights issues raised by businesses in the ABS Business Conditions and Sentiments monthly reporting. In February, businesses identified COVID-19 restrictions (including border restrictions limiting the ability to source staff, capacity limits and increased cleaning requirements), as the top factor significantly impacting their performance.

However, the reporting has also uncovered some positive shifts. The number of businesses citing reduced cashflow and reduced demand as a significant factor impacting their business more than halved.

The March release showed that 46 per cent of businesses expect it to be “easy” or “very easy” to meet financial commitments over the next three months, compared to 23 per cent in August 2020. Nineteen per cent of businesses expect to increase staff numbers over the three months April–June. 

Diverging recovery paths

Global growth is recovering strongly, but the rising human toll and millions of unemployed reveal the extreme social and economic strain the global community still confronts, according to the International Monetary Fund (IMF). Fourteen months after the start of the COVID-19 pandemic, the IMF’s April World Economic Outlook forecasts stronger than expected global growth of six per cent this year, moderating to 4.4 per cent in 2022. The swift policy action worldwide, including US$16 trillion in fiscal support, prevented far worse outcomes, says IMF chief economist Gita Gopinath.

High-frequency indicators suggest manufacturing and trade are back to pre- pandemic levels, with the services sector lagging. The manufacturing rebound has also helped lift metal and energy prices. But the IMF cautions improved forecasts are mainly due to upgrades for advanced economies. “The outlook depends not just on the outcome of the battle between the virus and vaccines, but also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage,” the report says. “Diverging recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations... reversing gains in poverty reduction, with an additional 95 million people expected to have entered the ranks of the extreme poor in 2020.”

Good news was that global greenhouse emissions were four per cent lower in 2020, but the report cautions, “This decline is likely temporary. The global economy must produce similar declines every year of the next 30 to lower emissions 80 per cent by 2050.”