Finance Leads The National Job Losses

Sydney Morning Herald

Monday December 22, 2008

Clancy Yeates

THE economic crisis is taking its toll on two of the country's biggest employment sectors. The latest official figures show heavy falls in finance and retail jobs in the three months to the end of November.

Wounded by the market turmoil, the finance and insurance sectors posted the sharpest percentage decline of 5.5 per cent, or 22,500 jobs, in the latest quarter.

The industries employ 380,000 people nationally and nearly 7 per cent of Sydney's workforce, but have been rocked by lay-offs from local and international finance houses.

The second-fastest fall came in wholesale trade - the back end of the retail economy - which posted a decline of 5 per cent, or 23,200 jobs, amid poorer sales.

Retail jobs decreased by a more modest 21,200 jobs, or 1.4 per cent, as companies were more likely to cut back-end staff before those on the shop floor.

A senior economist at ANZ Bank, Julie Toth, said falls in jobs tended to lag behind the rest of the economy, and the loss of finance jobs reflected falling profitability during the global financial crisis.

"Retail and wholesale trade are showing the effects of deteriorating retail turnover through the middle of 2008," Ms Toth said.

Retailers have so far avoided large-scale lay-offs, but Christmas is shaping up as a crucial test.

More than 1.5 million people, or roughly 10 per cent of the national workforce, are employed in retail.

The executive director of the Australian Retailers Association, Richard Evans, said the Christmas period usually accounts for about 15 per cent of sales and is even more profitable than that suggests because of higher margins.

But this year many retailers had discounted their goods during the period to entice customers, who were spending less than previous years.

There were anecdotal reports of more people in the shops, but that they were spending less than last year, he said.

Despite the economic gloom, retailers were hoping for a bounce in last-minute Christmas sales, as billions of dollars in Federal Government handouts trickled into the economy.

Mining jobs increased by 4.8 per cent in the quarter, but Rio Tinto has laid off 14,000 workers since the figures were recorded, and Macarthur Coal and Xstrata sacked more than 400 workers last week.

Ms Toth described the rise in mining jobs as the "last gasp" in a sector set for decline.

© 2008 Sydney Morning Herald

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