Australia’s is more than ever a service-based workforce despite the surging resources sector, a new analysis of changes to the Australian workforce shows.

A look at the ABS’s trend employment data shows that since the start of 2007, the mining sector has significantly increased its share of the workforce, from just 1.3% in February 2007 — the peak of “Mining Boom Mark 1” — to 2% now. The industry shed jobs in 2009, but not quickly enough to reduce its overall share of the workforce. And in the past 12 months, it has surged. Even so, it still employs only 220,000 people — far smaller than most other industries and still significantly below agriculture. The latter sector held on to its workers through the economic slowdown but since late 2010 has shed workers rapidly. It is now down to 2.8% of the workforce, from 3.4% at the start of 2007.

The other fast-growing sector is health and care services, which became our biggest employer two years ago and still shows no signs of slowing down. It now employs more than one in 10 of all workers in the country, and since 2007 has increased its share of the workforce from 10.3% to 11.5%. To put that in context, whereas mining has added a net 87,500 jobs since February 2007, health and care services has added just under 240,000.

Professional services has also seen strong growth. That’s a cover-all category that includes engineering, law, accountancy, advertising, market research, consultants, vets, architects and so on. That category has increased its share of the workforce from 7.1% to 7.7% since 2007. That translates into more than 130,000 net extra jobs. The sector was barely troubled by the economic slowdown, with a flat period in 2009 but otherwise regular growth every quarter.

The financial services sector, however, has only just started recovering from the slowdown. It has put on a net 24,000 jobs since 2007 but growth has really only returned in 2011. Education and public administration, both of which rely heavily on government funding, have been static in terms of their overall share of the workforce.

The other significant service sector, retail, hasn’t fared as well: it has lost about 0.5% of its share of the workforce and is now down to 10.9%, but it’s still managed to add just under 50,000 net jobs since 2007, albeit with little growth in 2011 as the big retailers lamented cautious consumers and the drift to online shopping.

Of the other big-employing sectors, construction has stood up well despite the collapse in housing construction, and has held onto its share of the workforce and added net 94,000 jobs, mainly in 2010 and 2011 as the mining boom resumed and the government’s stimulus packages hit full stride. But for manufacturing, the news is bleak: in August it hit 954,000 jobs, a net 72,000 down since 2007 and 1.4% lower in its share of the workforce — the once-dominant sector now employs just over 8% of the workforce.

The national figures, however, give a slightly misleading uniformity to quite large differences between the larger state economies, although since the numbers involved are much smaller, they tend to bounce around a lot more. Mining workforces have increased significantly in most states, with the largest rises, off big bases, predictably occurring in Queensland and Western Australia, but in South Australia mining has actually gone backwards, from 12,000 to about 8000 jobs. The manufacturing decline has hit NSW as hard as Victoria, with both states losing about 30,000 manufacturing jobs since 2007. But in Queensland, there’s been a healthy rise in jobs in the sector, from 155,000 to 167,000.

Most significantly, the epicentre of retail’s problems is in NSW. The sector in NSW employed well over 200,000 people throughout 2008 but dipped below that as a result of the economic slowdown, and it hasn’t yet recovered. In Victoria, retail has recovered strongly since mid-2009 and has put on about 15,000 jobs to leave it slightly above its 2007 level. In Queensland the sector has recovered and is now just below its 2007 levels, as it has in South Australia and in the west. Only in NSW has the sector remained stuck where the slowdown left it — possibly a legacy of the long period of economic gloom left by a dying Labor government.

Victoria has also seen the strongest growth in professional services and financial services. NSW still remains the largest employer in the financial sector, but the Victorian sector has grown more rapidly over the past two years. And all the large states have seen big increases in their health workforces — except, oddly, South Australia, where the total number of health workers has only increased by 6000 over the period.

But overall, and despite the mining boom, the service sector of the economy, which employed 64% of the workforce at the start of 2007, now employs just a fraction under 66%. It’s a rapid change for just under five years — long-term changes exacerbated by the consequences of the GFC and the hammering manufacturing has taken as the economy has recovered.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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