Friday, 02 September 2016 16:29

Inconsistent demand for execs continues to plague ICT sector Featured

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Inconsistent demand for execs continues to plague ICT sector Image courtesy of Stuart Miles at freedigitalphotos.net

The rising and falling demand for executives in the ICT sector continues, with demand in August falling sharply by 10% after two consecutive months of increases, according to the latest demand index from EL Consult.

The August decline was mirrored nationally across all business and industry sectors, with a drop  of 8% in the number of new positions after three consecutive months of increases.

The decline in ICT industry postions in August followed an increase of 14% in July, and a larger increase of 17% in June – a trend described by EL Consult managing director Grant Montgomery as “rare for the ICT industry” and due to a significant gap between the nature of IT investment decisions and full implementation.

But, it’s not all gloom and doom for executive job opportunities across the entire ICT sector, with the August decline in demand in New South Wales and Western Australia partly counteracted by gains in Victoria and Queensland – but not enough to produce an overall positive result.

And, in a good sign for the ICT sector, EL Consult says there were more positive states and territories than in all other sectors.

Montgomery says that the IT Index is extremely volatile but this is “mainly due to its low base that has never really fully recovered from the end of the tech wreck”.

On the national figures across all business and industry sectors, Montgomery says the executive demand index has registered three consecutive months of considerable increases in August, with July showing a massive 18% increase. “The decline this month (August) of 8% in this light is therefore, not very surprising,” Montgomery says.

“The floodgate of businesses wishing to get back to business and make new executive employment decisions after the drawn out and harrowing political campaign has now dropped off. But this drop off or correction is not bad enough to suggest any long term economic ramifications are being predicted.

“I am still bullish and reasonably confident that the Australian economy will continue to move in a positive direction and absorbing the knocks created by a number of international issues.

“The reporting season for Australian listed company results is all over the place and do not give a good indication of the general state of the economy but employment particularly in the engineering and finance sectors show that capital investment is still on the rise.

“But any economy that relies, in this case, on apartment building in Sydney and Melbourne, is not sustainable particularly now that banks and some state governments are playing with mortgage levels and approvals,” Montgomery warns.

Montgomery says there is still a lot of uncertainty in Australia’s economy, “and that is backed up by the reports of very low inflation and wages growth”.

“As the Reserve Bank said recently ‘with very subdued growth in labour costs and low cost pressures elsewhere in the world, growth is expected to remain soft for some time',” Montgomery notes.

“Given that the Australian economy has moved away from manufacturing and there has been a fallout in the resource industries, it is not surprising that it was the smaller states that triggered most of the overall reduction in new executive positions this month.

“The larger states — New South Wales, Queensland and Victoria, no doubt riding on the property developers back along with an infrastructure boom in NSW actually showed employment increases.

"But a fall-off in demand from Tasmania, South Australia, Western Australia (now a small state since the cessation of the resources boom), the Northern Territory and the ACT was severe enough to overshadow the larger states and take the E.L Index into negative territory.”

Montgomery says the standout for executive jobs growth was in the “management” sector, where demand in August rose a further 9%, culminating in a rise of more than 40% since April, outpointing other sectors.

“But this result has two sides; management is a de-facto index on government jobs growth as many government jobs are designated 'managers' regardless of whether they are accountants, engineers or marketing experts.

“With this in mind, it is not surprising that management underperformed in the first quarter of 2016 while government pruning and budget restraint was the play of the day and has since recovered strongly.

“But, while any growth in new jobs is good, a strongly growing bureaucracy is not a very good or sustainable way of keeping the economy primed.

“Public sector cost cutting is not happening at the state level and does not seem to be on the agenda at the federal level any more either,” Montgomery concludes.


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Peter Dinham

Peter Dinham - retired in 2020. 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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