Labour Market Tight; Hint Of New Life In Building

THE number of job advertisements eased last month but the labour market remains tight and it may register a further 20,000 new jobs when official figures for September are released on Thursday.

The total number of jobs advertised in major metropolitan newspapers and on the internet fell by 0.4 per cent last month to an average of 247,853 a week. While this follows three months of falls, the total number of advertisements in September was still up 33.1 per cent from a year ago.

ANZs head of Australian economics, Tony Pearson, said total advertisements remained at high levels, but the monthly trend rate of growth was easing.

"We view this as a consolidation in the labour market rather than a change in direction," he said. "With economic growth continuing to show considerable strength, demand for labour will remain robust and the labour market will remain very tight."

In a separate report, Australias construction industry has expanded, for the first time in seven months, but analysts say it is too early to call a recovery in the housing market, with affordability low and sales falling.

The Australian Industry Group-Housing Industry Association Performance of Construction Index increased by 6.8 points to 55.2, above the 50-point level separating expansion from contraction. The increase was the strongest rate of growth since June last year.

Australian Industry Group chief executive Heather Ridout said the figures were encouraging, but growth was off a low base and could not be interpreted as a turnaround in the industry.

The higher levels of activity reflected an increase in work on new and existing projects..

Also, the HIA-Australian Property Monitors Land Monitor report shows residential land prices remained high and continued to hamper new-home building. HIAs managing director, Ron Silberberg, said statutory charges and taxes imposed by governments were making land unaffordable. "If new construction doesnt take place, further price pressures will be placed on the existing housing stock," he said in a statement.

Home sales also fell last month. Figures from Australias largest mortgage broker, Australian Finance Group, showed a national decline of 21.2 per cent. Victorian sales dropped 21.9 per cent, although the average mortgage grew from $289,000 to $304,000.

AFG general manager of sales and operations Mark Hewitt said uncertainty over problems in the US subprime market kept potential buyers away.

After the August interest rate rise, more buyers protected themselves against future rises, with fixed-rate mortgages up from 18.3 per cent of total mortgages in August to 20.4 per cent last month.

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