Assessing the health of Australia’s labour market is complex. While unemployment rates are a high-level indicator, geographical, industry and skills differences are also key factors in determining the overall state of the labour market in Australia.
KPMG’s insights into the Australia’s labour market examines industry and regional dynamics that influence labour demand and supply. Our detailed analysis highlights factors that shape the labour market’s trends and fluctuations and is based on individual elements that contribute to the overarching unemployment rate number.
KPMG Labour Market Pressure Index
Designed to measure inflationary pressures due to labour market tightness, KPMG’s Labour Market Pressure Index offers organisations a comprehensive view of the labour market's health in Australia.
Key insights into Australia’s labour market
- Australia’s labour market is still constrained
The KPMG Labour Market Pressure Index is still deep in the ‘red’ zone, indicating significant constraints still exist in Australia’s labour market. However, the index is moving upwards and likely to be back in balance by the end of Q3 2024. - Real wage growth to rise as inflation eases
With the tightness pressures diminishing, nominal wage growth will soften in the near term, although we expect real wage growth to improve as inflation subsides.
- Skill matching efficiency needs to improve
Australia’s labour market remains relatively inefficient with a low level of matching still occurring between employers' requirements and jobseeker skills (measured by the Beveridge Curve). Employers need to post more vacancies to fill a given number of roles due to a mismatch in applicants’ skills and employers’ demand.
Download: Australian labour market in detail
For a detailed analysis of Australia’s labour market that focuses on industry and regional aspects contributing to unemployment numbers, read KPMG's Australian labour market in detail.
How KPMG's Economics team can help
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Using KPMG's Labour Market Pressure index, our Economics specialists can help you understand the impact of KPMG estimated equilibrium unemployment rate and actual unemployment rates on your business.
To learn how KPMG’s Economics team can help you navigate Australia’s current business and economic environment and to plan for future developments facing your industry, contact us.
