Executive demand slides

The executive job market is taking water amid economic and governmental pressures, according to the E.L. Executive Demand Index.

The Index fell 7 per cent in April, continuing its decline that began a year ago.

Mr Grant Montgomery, Managing Director of E.L Consult, a leading executive search firm that has researched and published the E.L. Executive Demand Index for over 30 years, said: “As to be expected, the Index continues to fall amid relatively high interest rates in Australia and the US.

Rising Unemployment

Montgomery said the E.L Index as lead indicator of general employment is now forecasting higher unemployment.

“The measurement of executive employment is significant because it leads general employment.

“People only hire expensive executive employees when they are positive about the future, and they are first to go because employers need to keep their skilled and semi-skilled employees at least until their order book has evaporated.

“So, rising general unemployment is therefore unlikely to occur immediately and inflation and interest rates are expected to remain high for some time to come. This will probably mean interest rates will not fall until March 2025 interest rates will be falling when the Reserve Bank fights a different battle that of a looming recessionary economy.

“The government is now further magnifying this prediction with an inflationary budget with increases in government spending, and the opening of the tap on public sector expansion.

Inflationary Government spending

“While the Reserve Bank, is now asking for the government to slow down on spending and reduce the impact on aggregate demand, the government is politically committed to offering an open cheque to union demands - regardless of what it means to Australia’s general economic health.

“No one in their right mind believes interest rates will fall or productivity will improve this year.

“Of course, we are not in a vacuum. The US economy is also showing recalcitrance when it comes to bringing inflation down into its target band, leaving mortgage rates there at above 7 per cent.

“While the US inflation and interest rate environment remain high, there is less chance for the Australian interest rate environment to deflate.

“After the US Federal Reserve’s December meeting, financial analysts were expecting six interest rate cuts in 2024, beginning in June. But given that inflation has remained high, and the economy is still going strong, that doesn’t seem to be happening anytime soon.

Among the states, New South Wales, Victoria and Queensland were the worst affected by the fallout. Western Australia made a modest 2 per cent rise on the back of increased employment in the public sector there.

In the business sectors, the worst affected sector was information technology, which fell by a massive 22 percent. This is unfortunate, as strength in this sector shows that business large and small are thinking about making future productivity initiatives.

Demand was higher in Engineering and Information Technology, with Engineering demand better across both online and offline job advertisements. Losses in the other sectors was moderate.

Head over to the E.L Blue resources page for the full report.

Call Grant Montgomery on +612 9221 6688 for further details