Demand for executives in Australia has fallen to its lowest level since 2006, according to EL Consult's Executive Demand Index, an indicator of general employment and economic activity in Australia. The index has fallen a further 6% this month, the eighth fall in the last nine months.
Most other economic indicators are now supporting the EL executive demand Index's initial findings. These include slowdowns in large scale business investment, falling business and consumer confidence, lower new home construction figures, and weaker retail sales particularly in white goods.
Grant Montgomery, managing director of EL Consult, said: "It is what might be expected. Falls outnumbered rises with the notable exceptions of mineral-rich WA and the demand for accountants as they grapple with increasing work from troubled investments companies like Opes Prime."
"The April EL Index once again proves the predictive qualities of executive demand. What has been happening for eight months is now being reflected in downturns in a brace of other Australian economic indicators."
"The continuous falls indicate that businesses do not have a positive outlook and are moving to a cost control stance instead of the more expansionary attitude that existed in more buoyant times a year ago," Montgomery said.
Engineering, general management, and marketing and sales positions have all fallen back, suggesting that business is bracing for a potential storm on the horizon.
"Despite this Western Australia continued unabated with rises in demand of nine per cent in April.
"Without the support of a semi-controlled economy like China buying Australian resources, the overall position of Australia would be a lot worse this month. This would indicate the difficulties the Reserve Bank has in setting policy and perhaps why it chose to keep cash rates level this month.
"On the one hand all indications are that the economy is slowing but the boom in the resources sector has meant that other sectors have to fall that much more for Australia to record a significant overall negative result," Montgomery said.
Len Rust is publisher of The Rust Report.