Downturn and the folly of generalisation

Of course, these are hard times. The RBA has slashed interest rate to 3.00% (50 year low) and is on the verge of officially declaring recession in Australia.

Employers confidence has taken a beating. Hudson’s latest report revealed only 18.6% of employers intend to hire new staff, while a corresponding 17.8% will decrease headcount, resulting in a net effect of 0.8%. A similar report by Manpower also found employment outlook to be grim with only 17% of employers intending to increase headcount while 16% forecast a decrease.

If we take a closer look, it’s not all bad news. Some sectors like utilities, healthcare and education are maintaining confidence (see chart).  Regionally, employers in states like ACT and QLD are still hiring as confidence in VIC and NSW dipped.

Numbers look garish when interpreted in national averages. Generalising and lumping all regional economies under one national umbrella does not paint an accurate picture of the realities at the local level. Just as national unemployment rate of 5.2% doesn’t means much at the local level, employers sentiments varies widely.

Sure times aren’t exactly rosy, but parroting national data only adds to the collective panic, and distracts everyone from the important task of rebuilding the economy.