MNI REALITY CHECK: Aussie June Jobless Rate To Edge Higher

--Jobless rate set to rise, 

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's unemployment rate is expected to edge higher in

June as the number of people who have resumed looking for work outnumbers new

positions created, but professionals in the field tell MNI the underlying

situation remains weak.

     The Australian Bureau of Statistics will release Labour Force date for June

tomorrow, with unemployment tipped to increase to 7.2% from 7.1% in May and the

recent renewed lockdowns in Melbourne and other parts of Victoria weigh further

in months ahead.

     Pointing to a weaker underlying labour market, Federal Treasurer Josh

Frydenberg said earlier this week that Australia's "real" level of unemployment

was 13.3% when including people who have decided not to look for work during the

Covid-19 disruptions.

     Key points from MNI interviews ahead of the July 15 report:

     "There is no evidence of any V shaped recovery. If there is a recovery it

might more like the Nike swoosh."

     "We've seen no major changes to employment in the (residential

construction) industry -- which employs around one million people -- because it

takes a long time for shocks like this to flow through."

     "Without (the Government's stimulus package) Jobkeeper we would have to lay

off three quarters of our full-time staff."

     --Julie Toth, chief economist, Australian Industry Group

     "We are seeing deflationary pressures rising and the first signs of wages

deflation at the top end of the market, while in the middle market the cuts are

more about hours worked than wage rates.

     "We are concerned that when the data indicated a levelling off in the falls

in hours worked (in May) that this was a pause rather than a turning point.

     "Late June is also a time for redundancies and early retirements as the

financial year closes at the end of the month.

     "Also, greater Melbourne is locked down, and that accounts for around 20%

of the Australian economy.

     "So there is no evidence of any V shaped recovery. If there is a recovery

it might be more like the Nike swoosh."

     --Tim Reardon, chief economist, Housing Industry Association

     "We've seen no major changes to employment in the industry - which employs

around one million people - because it takes a long time for shocks like this to

flow through.

     "After the global financial crisis it was about nine months before it

flowed through to employment in building and construction.

     "We expect that employment will slow over the next nine months during the

Government's 'Homebuilder' stimulus package, but by nowhere near the amount it

would have slowed without it.

     "But the last high rise unit block to be built in this phase has commenced

construction and as they come to completion over next six months there isn't

likely to be any work immediately following them, and we can't say when the next

phase will commence."

     --Leigh Harris, owner and manager of Safety Graphics, a Sydney-based SME

creating safety evacuation diagrams for businesses and institutions

     "We are a small specialist business working in the Workplace Health &

Safety area and compliance, and a big part of our business is with Universities

and colleges

     "80-90% of that segment has stopped completely and without (the

Government's stimulus package) Jobkeeper we would have to lay off three quarters

of our full-time staff."

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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