Medium-Long Term Employment Outlook: Looking ahead to 2020
Medium-Long Term Employment Outlook: Looking ahead to 2020 [PDF 10 pages, 464KB]
The employment outlook for the 2015-20 March year period is outlined in this paper, broken down by industry and occupation.[1] It will be used to inform the Department of Labour's medium-long term policy advice relating to immigration policy settings, and priority setting for tertiary education and industry training. It has particular focus on labour supply constraints arising from an ageing population and highlights the importance of productivity gains.
The Department's medium-long term economy-wide model draws on the latest available macroeconomic outlook to provide more detailed information on changes in the labour market to 2020.[2]
Key points
- The employment outlook over the medium-longer term is for steadier and moderate employment growth on average, but declining further out.
- Total employment is expected to increase by 172,400 over the 2010-15 period and by about 154,000 over the subsequent five years to 2020.
- This represents employment growth of about 1.6% per year (or 34,500 jobs on average) and about 1.3% per year (or about 31,000 jobs on average), respectively.
- This employment outlook is conditional on average GDP growth of 2.8% and 2.9% over the 2010-15 and 2015-20 periods, respectively.
- Increasing labour supply constraints arising from an ageing population and reduced labour force growth projections underpin this outlook. Labour supply constraints are expected to push up labour costs and lead to increased capital investment by firms. This is expected to result in productivity rising by about one-third from 2015 to 2020.
- Strong employment growth is expected in the primary processing, certain manufacturing industries such as machinery and equipment, metal products and in construction-related activities. Service industries, including the health and education sectors, will also experience modest employment growth. The growth will be strongest for highly-skilled occupations, including managers and professionals.
- Opportunities for lower-skilled workers are expected to account for more than one-third of employment growth over the 2010-15 period. This will be somewhat lower over the 2015-20 period as employment growth in the construction sector slows. The food processing, retailing, accommodation and construction industries are expected to create most of these opportunities.
- The number of workers retiring is expected to rise from about 50,000 per year during 2010-15 to about 70,000 per year during 2015-20, even with slightly higher participation by older workers.
Footnotes
[1] Regional forecasts for this extended outlook period are unavailable due to the lack of historical regional GDP data for recent years.
[2] Forecast completed in March 2012 using an economy-wide or Computable General Equilibrium (CGE) model and is consistent with macro-economic and macro-labour market “consensus” view, extending further the Treasury Budget Policy Statement (BPS) views on GDP provided to 2015-16 March year.
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