Performance Data use the Internet Vacancy Index (IVI) from the Department of Jobs and Small Business as an indicator for job creation trends on a city and regional level. The IVI is released monthly and collated using advertised job vacancies over the three major job boards: Seek, Career One and Australian Jobsearch. It was first published in 2010.
One drawback to this index, unfortunately, is that data for regional towns is captured within their wider regional area, which makes it hard to evaluate the real health and future prospects of the labour market in isolation. For example, Townsville and Cairns are both included in the Far North Queensland Region, yet both cities are substantial in size, 190,000 and 160,000 respectively; both have different dominant industry sectors and each of their job markets are influenced by their individual infrastructure projects that are in the pipeline. This makes it hard to gauge the true impact that major projects have on the labour market in real time. It is, however, a clearer indicator than the available ABS Job Vacancy data that is only available on a State level.
When analysing this indicator, the trend is important. An upward trend in jobs being advertised can be a lead indicator to a fall in the unemployment rate. As can be seen from the Melbourne example below: a tighter labour market can put upward pressure on wages, increase confidence in the economy and result in an increase in demand for property and put upward pressure on prices.
Job creation can also influence population movements. This has been evident in the Western Australian market after the end of the mining expansion phase when job vacancies peaked in 2012. At the same time, interstate migration peaked as people made their way to Western Australia for work. Since 2015, though, Western Australia has lost approximately 26,000 people to interstate migration. This has coincided with consistently low job vacancy numbers seen since May 2015.
As with all indicators, job creation data must not be looked at in isolation when evaluating the potential for future property price growth. However, at Performance Data, we do value it as a primary demand indicator because, in short, when people have jobs and confidence they are more confident to take on debt to secure property.