The downward trend in executive employment demand in July – both in the ICT sector and all other sectors - is reported in the latest employment Index from EL Consult recruitment.
For ICT - which actually recorded just a small gain in June - EL Consult says the Index for the sector has not had a “significant gain since January, indicating the lack of confidence in what should be a sector seeing measurable support”.
“The decrease in the value of the Australian dollar should provide more money for international companies to buy Australian ICT talent, but this has not fed through as yet,” EL notes.
Noting that executive employment is an important indicator of overall economic health, EL also warns that “another 3 months of falls and this important index will be showing a technical recession.”
“Executive employment which leads general employment is now only 3 months away from its own recession and this means the Australian economy won’t be far behind,” Grant Montgomery CEO of E.L Consult said.
“Unfortunately, at a time when we should be pump-priming a politically inspired Banking Commission has left us with a fully blown credit squeeze.
“I think we were all surprised at the extent of dishonesty that was going on when the commission finally caught the banks with their hands soundly in the cookie jar but fixing the situation has been less than inspired.
“The reaction was to control and swamp business and consumer lending with excessive rules and regulation without any regard the effect such actions will have on the economy.
“While most of the Commission’s recommendations are yet to be adopted, loan approvals are now being reduced to a fraction of their previous volume due to over prescriptive regulation.
“Lending is now controlled by auditors and the likes of APRA and ASIC who don’t understand and are totally untrained in the dynamics of macroeconomics, using inflexible box ticking prescriptive regulations,” Montgomery said
Montgomery warns that “the restrictions on loan approvals is effecting housing, construction and consumer confidence.”
And he said that Government infrastructure projects “are now about the only stars in an increasingly darkening sky”.
“Government certainly realises something is amiss and has ramped up the hiring of bureaucrats pushing the management index to all-time highs,” Montgomery says.
“As the Reserve Bank governor stated there is only so much more he can do. Cutting interest rates won’t help much if lending has stopped.
“Despite the claims by real estate agents and property journalists about the revival of the housing market it hasn’t happened and won’t until new building starts again and with apartment building stalled and buyers finding loans difficult to secure that could be some time away.
“And we are no longer immune to the Trump Xi trade wars. Demand for Australian raw materials are falling as China manufacturing and exports decline.
“Unbelievably, due to a confluence of events Australia has chosen to restrict credit at a time that all other wealthier nations are undertaking quantitative easing.
“It is in fact surprising that the recent stock market rout has taken this long to occur.
“Just when the ASX reaches the pre-GFC heights of 10 years ago a new cycle is beginning - how it will unfold this time we will have to wait and see.”