The big drop in May followed a similarly disappointing result in April when the technology index declined by 8%, which was 1% above the national decline for all sectors in April.
Like April, EL Consult managing director Grant Montgomery attributes the dampening down of executive demand in the technology sector for May largely to the cyclical delays in investment in the ICT industry.
Across the board for May, the national demand for executive jobs in all sectors jobs rose 4% – a small gain that leaves the employment Index below recent highs and lower than the same time last year.
And, according to Montgomery, the figures for May are indicative of Australia being in the “crosswinds of international and domestic economic and political trends”.
Montgomery says the results for the ICT sector in May reflect the nature of the industry. “This sector index tends to be sawtooth where there is a significant gap between the nature of the IT investment decision and full implementation."
And, despite being the largest employer of ICT-related positions, gains in New South Wales (7%) were not enough to overcome losses in every other region to produce an overall positive result.
On the national figures for all sectors, Montgomery, says the “mild increase” in the index in May is consistent with other measures such as the recent GDP numbers, export growth and building approvals.
“But behind this number, a not-so-positive trend is emerging. A trend that is indicative of the competing influences of the international and domestic economic and political trends that are currently in play.
“Company chiefs hate unpredictability, particularly when investing. Right now in the Australian corporate boardrooms there is deep uncertainty. Uncertainly in world economic events, future taxation rules and future directions in government spending.
“Investment in the higher executive end of the employment market indicates an expanding business and is generally accompanied by expansion into new markets and significant investment in plant and equipment.”
Montgomery acknowledges it is a difficult environment for corporate investment when “disruption” is the leading political agenda .The publicity and often the votes rewards those that disrupt policy – “Yet the disruptors rarely offer any viable alternatives.”
“This ‘disruption’ ideology is forming the basis of political discourse in Europe, the United States and particularly Australia with its overly powerful and flippant Senate. Concepts of growth and economic improvement are stifled. It is in this environment that corporations are expected to make long-term risky costly decisions that involve creating new jobs and retain existing ones.
“As the trend graph of executive employment shows, low achievement is now becoming a chronic condition and the new norm.”
According to Montgomery, what is needed for Australia to prosper is a consistent roadmap with some future certainty. “Companies are not sure they should take on executives and their expense when they cannot guarantee that demand and profitability will be extensive enough to pay for that hire.
“And, at an individual level, no one can be sure what taxation changes will be around to play with property investment or retirement savings.
“Of course, the news is not all bad and there are fortunately enough people out there still prepared to take the financial risks needed for the economy and move out of its mining dependence.”
And, Montgomery’s final word: “We should all hope that the upcoming federal election brings some stability and consistency. These are the strong growth drivers and they are far more powerful in improving all levels of society that any lofty arguments on taxation, interest rates, infrastructure or welfare spending.”