Random Analytics

Charts, Infographics & Analytics. No Spinning the Data. No Juking the Stats

Month: February, 2013

Random Analytics: Manufacturing Workforce Planning Scan (Feb 2013)

The Australian manufacturing sector continued to retract with another month of job losses and negative sentiment even after the federal government stepped in, announcing approximately $1 billion in support of a number of initiatives including dedicated manufacturing hubs and local content requirements for major projects. R&D tax concessions would be cut to offset the costs of the new programs.

The announcements made by the Prime Minister, Julia Gillard and the Minister for Industry and Innovation, Greg Combet were largely drowned out by more Labor leadership speculation. That being said, any announcement that concerns manufacturing with its long implementation lead times has the upcoming federal election (due on the 14th September 2013) as a backdrop. Further to that, any announcement made by the current government also has to be considered very carefully by the sector given that with most polls now showing Labour has a 2-party preferred of just 31% they would be suffering a devastating defeat.

Let’s have a look at this month’s data:

1 - Manufacturing_WFPScan_Feb2013

Figure 1: Australian Manufacturing Workforce Planning Scan (Jan – Feb 2013). Source: Manufacturing Monthly. Some stories have been verified against primary resources.

2 - Manufacturing_PosNegIndex_Feb2013

Figure 2: Australian Manufacturing Workforce Planning Positive/Negative Index (Jan – Feb 2013). Source: Manufacturing Monthly.

The four most dominant Workforce Planning issues for February were Employment (30.2%), IR (15.1%), then Engagement and WH&S both of which finished at 11.3%. Only Engagement (+3) and L&D/R&D (+1) finished the month in positive sentiment territory while Employment again finished negatively (-12) followed by WH&S (-4).

The Employment category which tracks employment gains, losses and general sentiment continued to dominate the manufacturing news. Representing 30.2% of all WFP stories (-17.2%mom), this included 11-negative stories offset by just 3-positives. This month the job losses were 1600 compared with just 42-added. I did include the 650-jobs which might have been created by Fresh Bins which were targeted for Victoria. According to the company’s founder, Paul Sewell, a lack of support from local and state governments forced him to relocate to Texas. With my Manufacturing Workforce Planning Scan data going back as far as May this is the 9th consecutive month of negative employment sentiment in which time 8,590 jobs have been lost, an average of 954 per month.

IR which tracks all aspects of industrial relations was the second leading category for February at 15.1% (+4.6%mom) due in large part to ongoing commentary and engagement by union leaders (4-stories) and two negative stories which were linked to medical manufacturing. The story which was most notable was Alan Kohler’s discussion on Inside Business with Cochlear CEO, Chris Roberts. I’m a big fan of Inside Business and an avid watcher so I was struck by Chris Roberts carefully worded criticism of Australian IR and productivity. Although he would not be directly called on offshoring I got the sense that it’s a decision on his and the Cochlear Board’s mind.

Equal third on 11.3% for February were Engagement (-2.9%mom), which includes items such as exhibitions and staff awards and WH&S (+0.8%mom) which covers all aspects of Work, Health and Safety. For a sector in trouble, manufacturing loves award ceremonies and conferences and this was reflected again in this month’s positive +3 Engagement sentiment (steady from January). Unfortunately, the -4 WH&S sentiment included another factory death, this time in Western Australia (the second consecutive month were a death has been reported) and a serious injury of a worker in a mushroom factory in Melbourne.

Here is a look at the February data.

3 - Manufacturing_Data_Feb2013

Table 1: Data for Australian Manufacturing Workforce Planning Scan (Jan – Feb 2013). Source: Manufacturing Monthly.

Finally, here is a look at the Employment Gains/Losses tracker for 2013.

4 - Manufacturing_Unemployment_Feb2013

Table 2: Manufacturing employment gains and losses for 2013. Source: Manufacturing Monthly.

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Random Analytics: Peak Employment (Part II): UK

I recently published a blog looking at Australian Peak Employment. Given some very good feedback and responses from the UK especially I thought it might be useful to have a similar look at the situation there.

Although the Office of National Statistics longitudinal depth was not as good as the Australian Bureau of Statistics in breaking down full-time and part-time employment pre 1992 there was some very good data not readily available in legacy ABS data captures, especially in areas like the self-employed.

Although I could only get data as far back as 1992 the picture it tells is as interesting as the Australian story (with data going back as far as 1978).

Here are the analytics.

1 - UK FT & PT Employment 1992-2012

Figure 1: UK Full-Time and Part-Time Employment (Mar – May 1992 to Oct-Dec 2012). Source: ONS.

Like the Australian example, the first graph highlights the almost identical increase in contingent (part-time) and full-time employment over the past decade. Since early 1992 full-time employment has increased by 10.3% (2.021-million) while part-time employment increased by 34.5% (2.072-million).

2 - UK FT & PT Employment Increases 1992-2012

Figure 2: Increases in UK Full-Time and Part-Time Employment (Mar-May 1992 to Oct-Dec 2012). Source: ONS.

Like the Australian example the increases in both full and part-time employment are identical. Unlike the Australian example which has not seen a downturn since 1991/92 the UK data shows a massive 1-million full-time jobs disappearing post GFC but over the past 12-months or so that has improved by around 400,000 new positions. Additionally, the start of this data series showed negative full-time employment through to early 1994 as the UK struggled out of the late 1980’s and early 1990’s downturns (oh, how I wish I had the data going back to 1987).

3 - UK Employment vs. Working Age Labour Force 1992-2012

Figure 3: Overall UK Employment versus Working Age Labour Force (Mar-May 1992 to Oct-Dec 2012). Source: ONS.

Here’s a look at the differential between total employment creation and the UK defined, economically inactive numbers. The UK created an additional 4.093-million new jobs; from 25.635-million in early 1992 to a record 29.729-million jobs at the end of 2012 (the pre-GFC high was 29.572-million in Mar-May 2008). The UK has steadily increased its working age population since 1992 (due to a combination a slightly lower than replacement fertility rate plus a higher immigration to migration ratio) which has left it with 3,734,000-million less jobs than that required to employ the 7.828-million increase in the working age labour force.

A quick point on the above. Like my previous article on this subject (avoiding wonkish angst) it should be noted that my Working Age Labour Force number in this graphic has been worked out utilising the ONS economically active rate data rather than my preferred method of using actual population statistics (you can see an example of this in my 2012 Abbott’s Promise piece).

In conclusion looking at the UK ‘employment type’ data is further confirmation of a global trend toward greater reliance on part-time employment, which on one hand is increasing employment to record levels while at the same time decreasing the amount of work available.

Has the UK reached peak employment yet? I’m not convinced it has but the more I look at the global data the more I am convinced we are reaching that point in the next decade. As I stated in my initial Australian analysis:

With an increasing working age population and a growing gap between jobs available the future is looking anything but certain, especially with the rise of labour augmentation and robotics replacing jobs quicker than they can be created.

Random Analytics: Peak Employment (Part I): Australia

One of the great aspects of research is that it often takes you in unexpected directions.

Over the past two months and previously in 2010 I conducted a series of hands-on research assignments in the area of contingent staffing. Although my current contingent research assignment has not completed (it has at least another two months to go) I started to delve into the macro level data and have made some interesting discoveries.

It has also got me thinking seriously about the following question which was not related to contingent staffing analysis.

When will Australia reach ‘Peak Jobs’?

First of all, let me explain what ‘Peak Jobs’ means.

In simple terms (via the blogosphere) ‘Peak Jobs’ is the idea that technology is replacing jobs faster than it’s creating them. For those more technically inclined it can also be attributed to the finalisation of the increased growth in average output (and income) per labour unit due to technological change since the 1820’s as put forward by Robert Solow. For another take on this subject the ABC’s online business reporter Michael Janda recently did a piece on Australia’s peak participation rate (it’s an excellent piece, however I am not a big fan of participation rate analytics, as it’s a data input which hides many sins but more on that in later articles).

Unless there is a major catastrophe and given that Australia’s population will increase significantly toward 2050 I am not going to go on the record today and say that Australia has reached the upper limit of its ability to employ more people. I will go on the record and say that within the next decade Australia will reach that number.

To commence the first in potentially many blogs about this subject here are some analytics.

1 - FTE & PTE Employment 1978-2013

Figure 1: Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

In the first graph I wanted to highlight the almost identical increase in contingent (part-time) employment over the past 25-years. Since February 1978 full-time employment has increased by 59.2% (3.016-million) while part-time employment increased by a massive 276.4% (2.520-million).

2 - FTE & PTE Employment Increases 1978-2013

Figure 2: Increases in Australian Full-Time and Part-Time Employment (Feb 1978 – Jan 2013). Source: ABS.

To emphasise the almost identical nature of full and part-time employment creation here is a look at the increases in both employment types since 1978. Notice the big drops in full-time employment from 1982/1983 and 1990/1991 (the last recessionary periods in Australian history) and the steady, almost linear growth of part-time employment during the past two and a half decades.

3 - Employment vs. Working Age Labour Force 1978-2013

Figure 3: Overall Employment versus Working Age Labour Force (Feb 1978 – Jan 2013). Source: ABS.

Using a similar representation I wanted to finalise the graphs with a look at the differential between total employment creation and the working age labour force. Australia has created an additional 5.536-million new full and part-time jobs, from 6.010-million in February 1978 to a record 11.546.7-million jobs as of January 2013. Contrary to populist belief the working age population of Australia has steadily increased since 1978 (due to a combination of higher than replacement fertility rates plus immigration), effectively outpacing employment creation by 2,400,000.

Two quick points in relation to the above. Firstly, to avoid wonkish angst it should be noted that my Working Age Labour Force number in this graphic has been worked out utilising the ABS participation rate data rather than my preferred method of using actual population statistics (you can see an example of this in my 2012 Abbott’s Promise piece). Secondly, although not included in the above graph from 2018 the Australian labour force grows by approximately 475,000 as the working age officially increases to 67 (as at 2011 there were 507,252 people between the age of 59 and 60 who will be 66 and 67 in 2018 and I’ve factored in a high mortality rate of approx. 6%).

In conclusion the start of my ‘Peak Jobs’ discussion is focussed on the increasing use of contingent labour in the Australian economy and a widening gap between growth in employment and the working age population. As shown in the data there is an undeniable trend over the past two and a half decades in terms to utilise part-time labour solutions rather than traditional full-time employment. In fact in 1978 the ratio of PTE to FTE jobs was 1:5.6 but this has decreased to just 1:2.4. It would only take another recessionary period to decrease this ratio further as demonstrated in the loss of FTE during previous downturns.

With an increasing working age population and a growing gap between jobs available the future is looking anything but certain, especially with the rise of labour augmentation and robotics replacing jobs quicker than they can be created.

In part two of this series I’ll be looking at similar data from comparable countries to see if the shift to part-time employment and potentially peak employment is a global phenomena.

Update 1 (25/02/2013): Initially this blog was going to be a series about Australian Peak Employment issues. However, given some excellent feedback and interest I’ve decided to look at other countries to see if this is a global issue (which I believe it is). For consistency, I have amended the original blog name from Australian Peak Employment (Part I) to Peak Employment (Part I): Australia.

Random Analytics: UPDATED Mining Workforce Planning Scan (Jan 2013)

On the 1st of February I released the first of this year’s Mining Workforce Planning Scans. Since that release I have come across two additional pieces of intelligence which have altered my viewpoint of where mining is currently. First let me detail the additional data.

The first is a mea culpa. At the time of release I was capturing data via a daily email update from Australian Mining which I believed contained all the daily stories. This turned out to be an assumption (of the make an ass out of me, not you kind). In fact by correcting my methodology (using the News archive facility) I was able to add 9-stories, or 4.8% more data to the January statistics.

The second and more interesting piece of intelligence was that over the weekend I was able to complete a data validation of the 2012 Australian Mining data (all 1963 stories) and then converted that to the new format to allow for additional analysis. More on that after a look at the updated January data.

Here is the updated January Workforce Planning Scan with a slightly reduced WH&S count (no additional stories) and a slightly higher Employment count (one addition). Augment and Diversity also increased slightly with an additional story each.

1 - Mining_WFPScan_Jan2013 - UPDATED

Figure 1: Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

The updated January Positive/Negative Index has only two changes. Augment and Diversity both increase by +1 to the value of 1 with a positive story each.

2 - Mining_PosNegIndex_Jan2013 - UPDATED

Figure 2: Australian Mining Workforce Planning Positive/Negative Index (Jan 2013). Data sourced from Australian Mining & News Archive.

Updated January data with an additional nine stories as previously mentioned.

3 - Mining_Data_Jan2013 - UPDATED

Table 1: Data for Australian Mining Workforce Planning Scan (Jan 2013). Data sourced from Australian Mining & News Archive.

When I initially looked at the finalised January data I came to the following conclusion:

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Based on the additional nine stories I wouldn’t have changed my view. However, after completing the 2012 analysis in more detail I have now found a compelling trend commencing in September which shows that the mining industry has returned to a business as usual range and has been in that mode from approximately November.

First of all, let’s look at the incidence of stories since Jan 2012.

4 - Mining_WFPScan_Jan2012toJan2013

Figure 3: Australian Mining Workforce Planning Scan (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

Then a look at the Positive/Negative Index during the same period.

5 - Mining_PosNegIndex_Jan2012toJan2013

Figure 4: Australian Mining Workforce Planning Positive/Negative Index (Jan 2012 – Jan 2013). Data sourced from Australian Mining & News Archive.

A lot has been made of the commodity crash that occurred in mid-2012 and its impacts on the mining sector (with my view remaining the same, in that most commodities remain overpriced and that oversupply will be the medium to longer term issue). Looking at the graphs over a 13-month period you can easily see that prior to the commodity crash Employment averaged a steady 14.7% and a very healthy 3.8 on the positive side. When commodity prices crashed from June/July the mining sector reacted in two ways. Some operators panicked, reacting by cutting costs and staff quickly, a fact highlighted by the negative 20 number for Employment in September. Other organisations have used the crisis over the past seven months to ‘clean house’, fixing up issues with both their book and labour. This is reflected in the Employment numbers continuing on a slightly negative trend, averaging minus 2.67 over the last three months from lows in September and October while the actual employment losses are still relatively minor (see the Employment Tracker in the previous January release).

I’ll no doubt have more to say about this in the February release as more data comes in but I can say with some confidence that the leaner (and meaner) mining industry has returned to business as usual and the ‘wait and see’ is on hold.

Random Analytics: Mining Workforce Planning Scan (Jan 2013)

The commencement of this year’s analysis of mining workforce planning brings forward two very distinct but different themes. With only 1 out of every 4 stories covered for the month related to workforce planning my initial thoughts were that the story is a continuation of the Q4 story, which was of an industry that had made the necessary cutbacks both in terms of costs and suppressing IR dissent but wasn’t quite sure where to go from here. The volatility of commodity prices, especially those of iron and thermal coal add weight to this direction, given that business will always take stability in prices over price instability (even when pricing is lower).

That’s one take on the first month of data. For the last five months of 2012 the mining coverage was dominated by employment contraction reports but prior to that it was Work Health and Safety (WH&S) which had the most reporting for six out of seven months as IR peaked at 24.4% in May on the back of the BMA dispute which even led the company to declare a force majeure. So, the question has to be asked, are we seeing a return to more normalised conditions?

1 - Mining_WFPScan_Jan2013

Figure 1: Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive. Some stories have been verified against primary resources.

2 - Mining_PosNegIndex_Jan2013

Figure 2: Australian Mining Workforce Planning Positive/Negative Index 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

The three dominant mining Workforce Planning stories for January were WH&S (38.6%), Employ (20.5%) and FIFO/DIDO (at just 9.1%). The only category to record a positive reading was Recruit/Retain (+2), while WH&S (-6) was in the negative followed by Employ (-3) and IR (-3).

WH&S which focuses on everything safety, both good and bad is often the leading workforce planning category because mining is a hot, dirty and dangerous business. January did not commence on a good note given there were a number of serious incidents including the first reported fatality of 2013 when a Santos sub-contractor died of possible heat-stroke outside of Roma. Several other fatalities were noted in China and Indonesia and these increased the overall WH&S tally but did not add to the Pos/Neg Index as international coverage is recorded as a neutral indicator.

The Employ category which tracks employment gains, losses and general sentiment which dominated the coverage between August and December of 2012 was reduced to 20.5%. With a further 164 jobs lost in the sector and 6210 gained in 2013. You would imagine that the first indications are positive, however the $1.8Bn AUD McMahon contract win to run the Fortescue Metals Group (FMG) Christmas Creek expansion included 6000 hires. As was shown last year, when the iron ore prices tumbled mid-year FMG came under intense financial and speculative pressure. With the potential for the $AUD to rise this year and FMG’s inability to dig up its product for less than approximately $110pmt I would be concerned that, if we see further volatility in the steel index then, the employment gains might not be curtailed by global economic conditions. Overall employment sentiment was slightly negative (-3) but this was more about some ongoing cost cutting and job shedding (just 164 jobs lost) without any large pickup in new hires (210 if you exclude the McMahon contract).

FIFO/DIDO (or Fly-In Fly-Out/Drive-In Drive-Out) is a workforce planning subject unique to only a few industries and has become the dominant method of bringing in large construction and mining workforces into Australia’s remote regional areas, especially over the last decade. In many respects when I look at the FIFO/DIDO figures I also double-check against Work/Life which covers all aspects of Work Life Balance and Work Life Fit issues. At just four stories (one negative, one positive and two neutral) it wasn’t dominate but it is still on the radar for 2013. Of note was a story from my home state of Queensland which discussed tougher guidelines for FIFO with the intent of increasing development of regional areas, thus probably opening a discussion and less emphasis on pure FIFO operations over regional improvements.

Recruit/Retain which follows all aspects of recruitment and retention was the only category to record a positive number for January. As recruitment agencies put out their expected mining employment/skills wish-lists for 2013, the Mining Oil & Gas Jobs infographic (which was a little basic to be honest) generated a very large discussion (for further info see the Mining Oil & Gas Jobs website. I would also suggest that mining recruitment agencies, especially the small ones might come under some pressure this year as the sector insourced its recruitment during the latter part of 2012 as a continual cost cutting exercise while at the same time Foreign Direct Investment (FDI) comes off the boil.

Lastly, IR had just three stories, all of which were separate New Year industrial actions thus it equalled employment with a negative 3. This included a story at the Hay Point Terminal where 300 construction workers employed by McConnell Dowell and GEOSEA, have been waiting for up to four weeks to be paid! Fair enough too.

Here is a closer look at the January data.

3 - Mining_Data_Jan2013

Table 1: Data for Australian Mining Workforce Planning Scan 2012 (Jan 2013). Data sourced from Australian Mining & News Archive.

Finally, here is a look at the Mining Employment Gains/Losses tracker for 2013.

4 - Mining_Employment_Jan2013

Table 2: Mining employment losses and gains 2013. Data sourced from Manufacturing Monthly Newsletter & News Archive.

To wrap up, I feel there is uncertainty in the story thus far. First of all, I am not sure at this stage we have enough data to state whether or not mining is starting to normalise or if the sector is still in its ‘wait and see’ mode. I suspect that it’s still in a ‘wait and see’ phase, especially with a federal election called for the 14th September 2013. Secondly, I know that the mining industry is no fan of the current Labor government and would be hoping for a conservative win but not sure how that will impact on the workforce planning issues and the data.

I guess we will all have to all ‘wait and see’…

Update 1 (1/02/2013): Magda Knight (Enhance Media SEO) requested an inclusion of a link to the Mining Oil and Gas Jobs site via email. Given that I had made especial mention of their January infographic (and it’s a most reasonable request) I’ve included that link above and in a previous paragraph.