The latest unemployment data for the Illawarra is bad news for the region, although it offers a small ray of light for the women in our workforce.
The Australian Bureau of Statistics (ABS) publishes an unemployment figure for the region every month, about a week after it publishes the national figure.
While we need to be careful with putting too much weight into individual monthly figures, because they are very volatile due to the relatively small sample used by the ABS to estimate what the figure is for the Illawarra, they are useful for examining trends and averages.
Unemployment in the Illawarra has been trending down strongly since around the middle of 2012.
In the June quarter of that year, unemployment averaged a depressingly high 8.5 percent .
But since then the Illawarra economy has performed extremely well, hitting an average of 4.2 percent in the September Quarter of 2018 – the lowest unemployment figure recorded in any single quarter for at least 10 years and a real reason to feel great about the region.
But according to the latest data, it seems that the party is about to end.
The last data released by the ABS at the end of December showed unemployment in October and November had spiked upwards, which is very bad news for the region.
In those two months, unemployment averaged around 6.4 percent – the highest quarterly unemployment rate figure registered in about two years, the worst October and November figures since 2012, and a clear break in the downward trend that we have been seeing for more than six years.
The quarterly unemployment rate for women has been below that of men since the end of 2015. Moreover, it has been trending down strongly since then – including in the last quarter of 2018.
While the volatility in unemployment data suggests we need to interpret the numbers cautiously, they are nevertheless a worry.
And percentages often fail to depict the extent of the problem.
According to the data, there are currently around 10,000 unemployed people in the Illawarra.
To put this in perspective, the current unemployed of the region would fill almost half of WIN Stadium.
The labour force of the Illawarra region is comprised of around 150,000 people.
The 10,000 people looking for work is twice the number who were seeking employment just 12 months ago – a sad picture that also illustrates how quickly it can all turn.
So what went wrong?
There have been a few factors.
The construction boom, fed by low interest rates and escalating property prices, came to an end around six months ago.
This has obviously taken a bit of time to work its way through the system, but is no doubt contributing to the growing problems in the Illawarra region.
What of the year ahead?
Unfortunately, I think it’s a trend that will continue.
As banks keep jacking up interest rates (even though the Reserve Bank of Australia does nothing) and the downward momentum in property prices continues, we can expect to see greater unemployment in the construction sector which will feed its way through to other sectors.
Less wages for the building sector – which is one of the largest in the region – means less money being spent in the region on all manner of things which generate employment.
But there is some good news amongst all the worrying data for the region.
The quarterly unemployment rate for women has been below that of men since the end of 2015.
Moreover, it has been trending down strongly since then – including in the last quarter of 2018.
The unemployment rate among women in the region averaged almost eight percent for 2012 but over the last few years has crunched downwards to an impressive three percent by 2018.
The figures for women have been below trend for the four quarters of 2018, contrary to the overall region figures and those for men.
In terms of numbers, the number of unemployed women looking for work in October and November last year averaged around 1,800 – whereas it was 3,100 in the previous year.
So it’s a small ray of sunshine indeed for the women of the region – at least for the time being.
Alex Frino is Professor of Economics and Deputy Vice-Chancellor (Global Strategy) at the University of Wollongong.