Little economic growth but job losses limited

Written on the 30th of March 2009

The unemployment rate will rise but Australia may well get through the global economic crisis without the big job losses seen in previous downturns, a leading expert told an economic outlook breakfast in Sydney this morning.
 
Output growth is probably close to zero but Australia is also likely to avoid a severe recession, HSBC Chief Economist John Edwards said to Sydney CFOs in the presentation held by finance and accounting recruitment practice Aequalis Consulting.
 
“This will be a rugged quarter. However, I think by the end of this year we’ll start to see a turnaround.
 
“There is unlikely to be a severe recession and it’s still possible there won't be a recession at all.
 
Regardless of whether our GDP falls below zero in the coming months, Dr Edwards said that most people will keep their jobs. “It’s likely that only a very small proportion of current employees will be made redundant during that time.
 
“However, overall job growth is slowing rapidly. Between August of last year and February of this year Australia lost about 100,000 full time jobs, and created 114,000 part time jobs, so that job numbers overall increased at a time when other economies were losing jobs.
 
“While jobs are steady overall, full-time jobs are falling. People are working fewer hours but remaining employed.”
 
This is supported by survey results released earlier this week by Aequalis Consulting, which suggested the majority of people don’t expect to lose their jobs during the economic downturn. The results showed 59.4 per cent of respondents believe it is “fairly” to “extremely” unlikely they will be made redundant in 2009, with just 14.4 per cent saying it’s highly likely they’ll be laid off.
 
“Another 33.3 per cent of people are expecting a salary increase this year, suggesting there is still a degree of confidence in the employment market,” Aequalis Consulting Senior Consultant Kim Smith said.
 
“These surprising results suggest that Australians are remaining positive, despite what economists are predicting about the looming recession. However, Australian employees are cleverly taking steps to prepare for the worst – just in case.”
 
Ms Smith said the solution is for employees to recession-proof their careers wisely.
 
Aequalis Consulting is launching its Career Services Seminar Series on April 8, 2009. For information contact Aequalis Consulting on (02) 8916 7600 or visit www.aequalisconsulting.com.au.