Labour shortages still ‘number one’ concern: RBA

October 21

Finding enough workers with the right skills is still holding Australian businesses back, the Reserve Bank of Australia says.

The experience varies across industries and individual firms but deputy governor Andrew Hauser says most employers are still struggling to fill positions.

“When we ask people, ‘what is really holding you back from providing more goods and services to the economy’ the number one answer is still mostly securing the right number and the right quality of labour,” he told Commonwealth Bank’s Global Markets Conference on Monday.

The senior central banker said it was the level of economy-wide competition for workers that mattered most when it came to fighting inflation.

“You’d hear a lot of feedback from firms who say, ‘I need to get trainees to do this’ or ‘I need to get people to do that’, and they’re being called away by some rival activity,” he said.

“It might have been mining, it might have been infrastructure construction, it might have been another activity – the Brisbane Olympics – you name it.

“People are all competing for those scarce resources.”

His comments followed another above-expectation job creation result for September.

Much of the strength in employment has been fuelled by public sector and non-market roles, especially in health and education.

In the context of taming inflation, Mr Hauser started from the assumption “a job is a job”.

“You’re always going to get sectors that are shrinking or not growing as rapidly, and that composition can tell you things, for example, about the mix of productivity,” he said.

“But when actually looking at inflation, you start from the assumption a job is a job.”

In September, 64,100 jobs were added to the economy and the unemployment rate held at 4.1 per cent from a downwardly revised figure in August.

Household spending remains another source of uncertainty pored over by the central bank’s economists.

Tax cuts flowing to households from July were expected to support consumption but Mr Hauser said it was not yet evident whether the pick-up would be delayed or not be as strong as previously anticipated.

“It isn’t quite as clear either way,” he said.

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