While consecutive monthly increases are usually the exception for the ICT sector, the EL index shows that — in line with an upward trend in employment across the economy — it rose 14% in July, following on from an even larger increase of 17% in June.
EL Consult managing director Grant Montgomery says two consecutive monthly increases are “rare for the ICT industry” given there is a significant gap between the nature of IT investment decisions and full implementation.
And, Montgomery says that after falling behind in the prior month, the ICT sector in New South Wales “roared back to life” with a significant gain in July.
“Whatever the reason, it is good news for middle management and Australian employment in general.”
According to Montgomery, the executive demand situation may also have been “supercharged” by the federal election results.
“Business may prefer the Coalition government, yes, but most importantly there is more certainty. Business hates making decisions where there is uncertainty and this time around it included taxation, superannuation, negative gearing and even union power issues that made any corporate budget or cash flow potentially highly inaccurate.
“It’s almost as if a floodgate was opened by the election ending and business is employing again.
“Even the structure of the Senate despite superficially being as bad as last time appears structured with more logical and less disruptive members and from a business perspective that makes legislative outcomes more predictable.
“There is hope that the overriding agenda will be to achieve the best legislation for Australia rather than simply stop the government of the day from working.”
The national increase in July of 17% in new jobs offered to executives is the third consecutive increase, putting the overall trend in executive demand at its highest point since July 2013.
“Despite some clear weaknesses in the Australian economy, there appears to be a lot of life left,” Montgomery says.
“There is a lot of money around and this international and domestic liquidity is lighting a fire under the economy.
“Interest mortgage rates in many countries are negative and some even have bond buyback schemes. In Australia, rates are now at record lows.
“While it is not as politically sensitive to lower business investment rates on Reserve Bank fluctuations, Australia is still becoming a more and more attractive place for companies to spend on capital expansion.”
Montgomery says every employment sector was up in July. “Even finance is up and this is seasonally different from what usually occurs this time of year.
“There is strength in real terms in the economy at large. According to profit margins, there is little pricing power, but the costs of expansion are as low as they have ever been.
“If the Reserve Bank of Australian had seen these types of figures a couple of months ago, they may not have cut rates.”