09 September 2005

Strong Australian economy blamed for skills shortage

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Despite warnings last month from the Reserve Bank of Australia (RBA) of a tightening labour market, the Australian economy created 32,600 new jobs in August.

Australia's The country’s jobless rate held steady at a near 30-year low of 5.0 percent.

The announcement on 8 September of the 12th straight month of job gains stunned economists, who had assumed the hiring would have to end at some stage and predicted a 7,500 decline.

The impressive performance came hot on the heels of figures on showing the Australian economy grew 1.3 percent in the second quarter, the best showing since late 2003.

With August's gain, the economy has now created a net 403,200 jobs, a furious pace for a country with a labour force of 10.6 million. The equivalent in the United States would be a payrolls rise of well above 5 million.

That has led companies to grumble about being unable to find suitable skilled workers, particularly in the booming mining and construction sector where wage rises have been far above the average.

Analysts had thought the economy might simply exhaust its pool of suitable labour.

Yet the proportion of the adult population in work has risen beyond all expectations to hit a record high of 64.8 percent in August. The government has relaxed its immigration rules and even gone so far as to run road shows in Europe touting for skilled workers to come and live Down Under.

With files from Reuters


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