Blue-collar workers to ‘bear the brunt‘ of jobs market slowdown

New forecasts paint a gloomy picture for the jobs market in 2024.

New forecasts paint a gloomy picture for the jobs market in 2024. Photo: AAP

Blue-collar workers will fare worse than their white-collar neighbours as the jobs market takes a turn for the worse, gloomy new forecasts believe.

Figures published on Monday by Deloitte Access Economics predicted jobs growth in industries such as construction, retail, hospitality, manufacturing and mining will suffer most as employers look to “right size their workforces” amid “subdued economic conditions”.

DAE partner David Rumbens said the “dial has shifted” on the jobs market, with two-thirds of the employment growth seen in 2023 coming before June and job vacancies sinking 14.4 per cent over the past year.

“Through the year to January 2024, the national unemployment rate has edged up from 3.7 per cent to 4.1 per cent, and the underemployment rate has edged up from 6.1 per cent to 6.6 per cent,” he said.

Australia’s jobs market has been running hot for several years, but economists have been predicting a slowdown for some time now.

They predicted high inflation and the interest rate hikes designed to combat it would slow the economy, reducing demand for labour.

It’s expected to be a gradual process, with the Reserve Bank expecting unemployment to reach 4.3 per cent by the end of the year, meaning widespread job losses are still seen as unlikely.

Blue-collar workers bear the brunt

But the slowdown isn’t expected to be felt evenly, with Deloitte predicting workers in industries like administration, arts, health care and finance to be most insulated from economic woes.

“Following estimated growth of 2.5 per cent (128,600 workers) in 2023-24 the white-collar workforce growth is expected to moderate to 1.5 per cent (78,200 workers) in 2024-25,” Rumbens said.

In contrast, blue-collar workforces will fare worse, particularly across the agriculture, manufacturing and wholesale industries – all of which will see job losses in 2024-25.

“The blue-collar workforce will likely bear the brunt of the slowdown, and is expected to grow by just 0.3 per cent (10,000 workers) in 2024-25,” the Deloitte report said.

Unsurprisingly, the forecasts also find that workers in jobs with more technical expertise – even in blue-collar industries – will fare better than those without, such as labourers and sales staff.

Professionals will experience the strongest jobs market conditions, Deloitte predicts, with skilled jobs like nursing and analysis to remain relatively strong.

“This occupation is expected to be supported by a 6.6 per cent (21,600 worker) increase for registered nurses, and a 10.7 per cent (11,500 worker) increase for management and organisation analysts,” the Deloitte report said.

Retail workers will be among the hardest hit by the slowing jobs market as big brands look to pare back to reflect lower consumer spending that began to set in over the Christmas period.

Employment will fall 2.6 per cent in the year to June, recovering to 0.3 per cent over the 2024-25 year as “real wage growth and a turn in the interest rates cycle” revitalise household finances.

What’s interesting is that the arts and recreation sector, which is also reliant on consumer spending, has a much more positive employment outlook.

“Robust employment growth is expected in the arts and recreation industry suggesting that spending on experiences has been considerably more resilient to cost-of-living pressures thanks to lingering pent-up demand post-pandemic,” Deloitte said.

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