Businesses are delaying hiring new staff as they look to control costs in the midst of difficult economic conditions, findings from a new survey reveal. The results, which come ahead of the Reserve Bank of Australia’s meeting today, also show job expectations are at a three-year low, and indicates no new jobs have been added since the March quarter of 2012.
“Until there is sustained improvement in confidence and trading conditions, we can expect businesses to keep a tight check on their expenses and continue to delay larger investments such as new jobs,” she said.
D&B’s research revealed that 44% of businesses see operational costs as their biggest barrier to growth in the coming months. The Business Expectations Survey presents a picture of a less optimistic business community, with decreases in all of the survey’s forward-looking indices – sales, profits, selling prices, inventories, employment and capital investment – compared to the previous month.
“With businesses keeping a careful eye on their expenses, the significant cost of hiring new staff appears to be dampening expectations for jobs growth,” Woods said.
But the report has been offset - and seemingly contradicted - by the ANZ Job Ads series. The latest report from the bank showed job ads were up 3% in February following a rise of 0.6% in January.
Despite what the bank called "tentative signs" that the job market was stabilising, ANZ economist Ivan Colhoun said the market showed the same signs of life in early 2012 before weakening over the remainder of the year. He echoed Woods, saying companies were wary of taking on new expenses.
Anecdotal evidence suggests that Australian firms are generally keeping a close eye on their bottom line, including labour costs. In addition, firms are already reporting that the degree of spare capacity in Australia’s labour market is greater than implied by the current 5.4% unemployment rate," Colhoun said.