Monday, 16 February 2015 12:50

Cautious optimism for IT execs with demand trending upwards Featured


The year has started well but cautiously for executives looking for employment in the IT sector, with executive demand in January rising a slim one percent (1%) following on from positive trends at the end of 2014.

According to the latest EL Consult Executive Demand Index, last month the IT sector remained well above its recent lows and in the middle of its recent trading range – unlike all of the other sectors.

Information Technology was one of only two sectors not to fall in January, with the sector underpinned by positive results in New South Wales, South Australia and Western Australia.

In this latest report, EL says that Demand for Australian executives rose a small 2% in January, and that it is very clear when looking at the where the executive employment demand is going that the Australian economy is weakening.

EL Managing Director Grant Montgomery says the positive areas of the economy to watch are infrastructure investment, largely driven by NSW, residential housing construction and the effect of a weaker dollar on exports.

Montgomery says, however, that growth in China, Australia’s biggest trading partner, is easing and this will have continuing ramifications throughout the economy and show why it is likely that the Reserve Bank will continue on a rate cutting agenda over the next quarter.

Montgomery, says that, as predicted in EL’s December report, the weakness in employment growth across Australia in all industry sectors has led to the Reserve Bank cutting interest rates.

And, while general employment is also weak, Montgomery says that the executive level employment levels are a better indicator of where the overall economy is going by showing where the actual investment is being made.

Montgomery points out that while the small rise of 2% in January might be surprising for the holiday period close analysis shows this was driven almost entirely by activity in marketing and merchandising and is unlikely to effect the Reserve Bank continuing a cut program into this year.

“Three months ago we said the weakness in the employment market was creating the conditions for a cut in interest rates in the year.

“We might have been a couple of months early, but we made this prediction at a time when many economists were still thinking there might be an increase in interest rates.

“And given the only mild recovery in the executive employment market in January, we expect the Reserve Bank to again cut official rates by a further 0.25% to try and stimulate the local economy, and tame the value of the Australian dollar.

“As always there are a lot of factors in the interest rate equation but it is worth noting that even after the recent 0.25 per cent fall Australia’s rates continue to be amongst the highest in the developed world.”

Montgomery says that despite the 2% increase in executive job opportunities in January, the EL Index remains almost 10% below the same time in 2014, and “what is more unusual is that an increase in demand in any sector rarely happens in January which is traditionally holiday and shutdown for many Australian businesses”.

“That there is holiday activity, no matter how small, shows how the profile of the economy and the jobs market is changing. As we move away from manufacturing and more into a service based economy so we changing from the traditional January shutdown to a 24/7 model. A trend that is further driven by increasing internet based service delivery.”

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Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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