National Executive demand plummets

Confidence wanes as executive employment falls

Small business now facing price and wage inflation adding to its list of woes.

Western Australia the major fallout of all the big states.

The demand for Australian executives shed a full 6 per cent in July as the market continues to be affected by interest rate increases and other local and international negative factors.

It is important to note that because of collection techniques the E.L Index is a lead index and shows trends 3 months in advance of the national employment figures and therefore is showing what will happen to un-employment numbers about September 2022

It follows a flat result in the previous months, confirming a negative trend is being baked into the index.

Mr Grant Montgomery, Managing Director of E.L Consult, a leading executive search firm that researches and publishes the E.L. Executive Demand Index, said: “Inflation and a string of interest rate increases as well as a war in Europe are all affecting business confidence in Australia.

“The pain of Interest rate rises is probably affecting small business, the nation’s largest employer, more than homeowners right now.

“After the banking enquiry and the ‘responsible lending’ folly, many small businesses have had to move away from banks and organise financing differently.

“Banks threw their hands up at business lending and regardless of this have always charged much higher rates than home mortgages deeming them less secure.

“Then came the pandemic, the war and now inflation which is pushing up input costs and eliminating profitability.

“To fight on they now must deal with a workforce that are demanding they catch up with inflation. In many cases the employer is unable - due to fixed contracts or market forces – to raise their prices to cover it.

Mr Montgomery went on to say that the employment boom of the latter half of 2021 is on the wane.

“Given the circumstances there is no doubt that employers are losing some confidence in the future economy and are holding back on building up their management teams.

The huge fallout in Marketing – a 32 per cent drop - is a prime example of the loss of confidence in the economy’s short-term future.

Only Information and Communications Technology (IT) and Management hiring showed any gains. 

“IT because employees there are paid above market and unlikely to be too concerned about inflation demands and the long-term outcome of any IT project is to cut costs.

“Government hiring is also up because profitability is not an overarching issue and the political issue of unemployment is.

Western Australia had the largest fallout among the larger economies with Tasmania the highest overall.

The Marketing index was lower across both print and online advertising, with print particularly weak.

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