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Economics | January 8 2020

Record public sector job vacancies Record share of luxury cars sold Job vacancies, Luxury cars; Motor cycles Job vacancies: Job vacancies rose by 1.6 per cent in the three months to November after falling 1.6 per

cent in the prior quarter. Vacancies are down 1 per cent over the year.

Vacancies by sector: Private sector job vacancies rose by 1.5 per cent over the three months to November to 215,200 but fell by 2.3 per cent over the year. Vacancies in the public sector rose by 3.0 per cent in the three months to November to a record 24,300 and were up by 13.0 per cent from a year ago.

Luxury vehicle sales: The CommSec luxury vehicle index rose for the sixth straight month, with annual sales to December lifting from 87,445 to 88,643. Sales of new luxury vehicles represent a record 12.4 per cent of total passenger car and sports utility vehicle sales.

Motor cycle sales: The Federal Chamber of Automotive Industries reported that motor cycle sales fell by 6.1 per cent in calendar 2019 to 89,199.

Job vacancies is a leading indicator for the job market, and therefore provides guidance on spending. Luxury vehicle sales have tracked movements in home prices and led the broader new vehicle market in recent years.

What does it all mean? It has become harder to determine where the job market is headed. In the past, job seekers would look for

positions on job market websites or in the newspaper. But in more recent times, job seekers scan social media or individual company websites for available positions. And more businesses are filling positions using imported labour due to skill mismatches across a raft of industries including construction, healthcare and hospitality.

While the Bureau of Statistics reports that job vacancies have lifted over the past three months, job advertisements (as measured by ANZ) have fallen four times in the past five months. Despite the mixed signals, the number of jobs has continued to lift with annual job growth healthy between 2.0-2.5 per cent.

January 8 2020 2

Economic Insights. Record public sector job vacancies

The online buying revolution has especially lifted available jobs in the Wholesale Trade sector to 7-year highs. There are more warehouses, more logistical staff and greater demand for related jobs like delivery drivers and couriers.

Over the past six months, annual sales of luxury vehicles have risen. And over the same six-month period home prices have also risen. Higher home prices boost household asset values and broader wealth and improve the borrowing capacity of budding car buyers. In the past, movements at the top end of the new vehicle market have led broader vehicle sales. And the same appears to be happening in 2019/20. Sales of sports utility vehicles in December were up 5.9 per cent on a year ago with sales in NSW and Tasmania also up on a year ago.

At the end of 2019, household wealth hit record highs, courtesy of higher home and share prices. And interestingly, sales of new luxury vehicles hit a record 12.4 per cent of total passenger car and sports utility vehicle sales in December.

What do the figures show? Job vacancies

Job vacancies rose by 1.6 per cent in the three months to November after falling 1.6 per cent in the prior three months. Vacancies are down 1 per cent on a year ago.

In original terms, annual changes in vacancies across states and territories were: NSW (down 3.1 per cent); Victoria (down 3.6 per cent); Queensland (up 5.5 per cent); South Australia (up 5.5 per cent); Western Australia (down 2.8 per cent); Tasmania (up 2.9 per cent); Northern Territory (down 12.5 per cent) and ACT (up 15.8 per cent).

Vacancies rose by 5,500 or 2.3 per cent in original terms in the year to November. In terms of industries, 10 of the 18 industries recorded flat or higher vacancies. Vacancies rose the most in Retail Trade (up 2,700), and Other Services (up 2,400). But vacancies fell the most in Real Estate Services (down 1,400).

Job vacancies in Wholesale Trade lifted by 1,400 or 13.5 per cent in the quarter to 7-year highs.

By sector, private sector job vacancies rose by 1.5 per cent over the three months to November to 215,200 but fell by 2.3 per cent over the year. Vacancies in the public sector rose by 3.0 per cent in the three months to November to a record 24,300 and were up by 13.0 per cent from a year ago.

CommSec Luxury Vehicle index

To get a gauge on the luxury vehicle market, CommSec tracks the sales of 17 luxury marques: Aston Martin, Audi, BMW, Bentley, Ferrari, Hummer, Jaguar, Lamborghini, Lexus, Lotus, McLaren, Maserati, Maybach, Mercedes-Benz, Morgan, Porsche and Rolls Royce.

Sales of luxury marques hit peak levels of 106,658 units in the year to December 2016. And in the year to June 2019, rolling annual luxury vehicle sales were down 19.7 per cent on a year earlier, hitting 4-year lows.

But in July 2019, rolling annual sales lifted for the first time in two years. And the rolling annual measure has consistently risen in the five months since.

In December the annual total of luxury vehicle sales rose by 1.2 per cent to 88,463 vehicles. Sales are down 3.5 per cent on a year ago after being down 13.1 per cent in the year to June.

Annual sales of Lexus were at all-time highs in the year to December and sales of Rolls Royce were just shy of record highs.

Luxury vehicle sales have now risen for six straight months, matching the gains in home prices. The hope is that the strength at the top end of new vehicle and housing markets will extend to broader strength for new vehicle sales, home sales and home prices.

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Economic Insights. Record public sector job vacancies

Motor cycle sales

The Federal Chamber of Automotive Industries reported that motor vehicle sales fell 6.1 per cent in calendar 2019 to 89,199.

“The 2019 market remained relatively steady in terms of its composition; however off-road bikes regained the status as the most popular category and comprised 38.5 per cent of the market. Road bikes claimed a 35.8 per cent share, ATV/SSVs (All Terrain Vehicles/Side-by-side Vehicles) accounted for 20.1 per cent of total sales, and scooters again took an increased share of the total sales with 5.6 per cent.”

“Among individual brands, Honda came in at number one with 20,819 sales (23.3 per cent market share) overall, Yamaha in second place with 19,945 sales (22.4 per cent share), Kawasaki in third with 8,962 sales (10.0 per cent share), followed by KTM (7,670 sales and 8.6 per cent), and Suzuki (6,934 sales and 7.8 per cent).”

“In an ongoing good news story, the scooter segment was again the only segment to show increases. The 2019 result was up by a significant 15.9 per cent, accounting for 5.6 per cent of the overall market (up from 4.6 per cent of total sales in 2018), Honda was the leader, followed by Suzuki, with Vespa in third place. BMW, Honda, Suzuki and Yamaha all saw increased sales in this segment.”

What is the importance of the economic data?

The Australian Bureau of Statistics releases Job Vacancies data each quarter. The data is useful in gauging the strength of the job market.

The Federal Chamber of Automotive Industries releases regular data on new vehicle and motor cycle sales. Cars and bikes are key purchases for consumers, farmers and businesses.

CommSec tracks luxury vehicle sales on a monthly basis. Over past years there have been close links between new vehicle sales and home prices and between luxury vehicle sales and the broader car market.

What are the implications for interest rates and investors? There are jobs to be had – especially, it seems in the public sector. And the surge in online sales has boosted

jobs in Wholesale Trade to 7-year highs. Combined with other data out today showing a sharp lift in building approvals, it is clear that there are economic ‘green shoots’ to be found. The hope is that higher population growth, more new building of homes and economic and social infrastructure will continue to create job opportunities. In turn, the hope is that a tighter job market will drive wages and prices higher.

The CommSec Luxury Vehicle index can be included in the Reserve Bank Governor’s list of ‘green shoots’. If broader new vehicle sales rise in coming months as expected, it would prove positive for companies in the Autos & components industry sub-group on the Australian sharemarket. In terms of future car sales, much will depend on lending policies of major financial institutions and the ability of car dealers to offer competitive pricing at a time when the Aussie dollar is soft against the greenback.

Commonwealth Bank Group economists have pencilled in another interest rate cut by the Reserve Bank of Australia in February 2020.

Craig James, Chief Economist, CommSec Twitter: @CommSec