Small Area Labour Markets publication

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The Department produces quarterly regional estimates of unemployment and the unemployment rate at the Statistical Area Level 2 (SA2) and Local Government Area (LGA) level.

March quarter 2020

Small Area Labour Markets

Impact of the bushfires on the March quarter 2020 estimates

The March quarter 2020 Small Area Labour Markets (SALM) estimates will reflect the impact of the 2019-20 bushfires. Unfortunately, it is not possible to definitively quantify the specific impact of the bushfires or the support arrangements made to people in fire affected areas (such as the suspension of Mutual Obligation requirements) on the unemployment estimates.

Accordingly, users should exercise care when interpreting the March quarter 2020 figures for bushfire-affected regions.

Change in Unemployment Benefit payments

On 20 March 2020, Newstart Allowance was discontinued and was replaced by the JobSeeker payment. While there are some minor changes to the population covered by JobSeeker, compared with Newstart, analysis undertaken by the National Skills Commission indicates that this has not had a material impact on the viability of using this payment as part of the methodological process used to produce the unemployment and unemployment rate estimates in SALM.

Impact of COVID-19 on the March quarter 2020 estimates

The COVID-19 pandemic began to have a significant impact on the Australian labour market from mid-March, when non-essential services were shut down and trading restrictions were implemented. The reference week for the March 2020 ABS Labour Force Survey, however, was in the first two weeks of March. Accordingly, COVID-19 did not have a significant impact on either the smoothed or unsmoothed SALM estimates for the March quarter 2020.

Changes to the geographic structure

As of the June quarter 2019 edition of SALM, the Statistical Area Level 2 (SA2) estimates are now based on the Australian Bureau of Statistics (ABS) 2016 Australian Statistical Geography Standard (ASGS). The geographical structure used in SALM is now aligned with the most recent ABS Census of Population and Housing.

Due to changes in the ASGS between the 2011 and 2016 editions, there were a number of breaks in series at the SA2 level. These were due, largely, to SA2s being split into multiple, smaller SA2s but there was also a small number of amalgamations and other breaks. For more information, please see the SALM 2016 Changeover User Guide, available on the SALM website.

Smoothed estimates not available for all SA2s and LGAs

Due to the breaks in series noted above, and because the production of smoothed estimates requires four consecutive quarters of unsmoothed data, smoothed estimates for SA2s or Local Government Areas (LGAs) that experienced a break in the unsmoothed series between the March and June quarters 2019 are only available starting from the March quarter 2020. For the June quarter 2019 to the December quarter 2019, the only available estimates are from the unsmoothed series, available on the Explanatory Notes page of the SALM website. As is always the case for unsmoothed data, significant caution should be exercised when examining these figures, as they exhibit far greater volatility than the smoothed series.

Introduction

SALM presents regional estimates of unemployment and the unemployment rate at two small area levels:

For approximately 2,200 ABS SA2s, on a State/Territory and Metropolitan/Non-metropolitan basis, provided in Table 1. For the States and the Northern Territory, estimates for the Capital City and the Rest of State are also provided; and

For approximately 540 Australian LGAs, provided in Table 2.

The estimates in Tables 1 and 2 are smoothed using a four-quarter average to minimise the variability inherent in small area estimates. A description of the methodology used to prepare the estimates in this publication is presented on page 45.

Caution: Highly disaggregated estimates of unemployment and the unemployment rate at the SA2 and LGA level can display significant variability and should be viewed with caution, particularly in regions where the SA4 level unemployment data that underpin the SALM estimates have been exhibiting considerable volatility. As a result, quarter-to-quarter comparisons may not be indicative of actual movements in the labour market. It is therefore recommended that year-on-year comparisons be used and that large movements in the SA2 and LGA data be viewed with caution.

Further, where large movements in the SA2 and LGA estimates are encountered, or in SA2s and LGAs with a small labour force, users are advised to examine Census labour force data in addition to the SALM estimates.

Labour market developments at the small area level

The March quarter 2020 SALM estimates show that 47.9 per cent of SA2s recorded a decrease in their unemployment rate over the year to the March quarter 2020.

In the March quarter 2020, 58.8 per cent of SA2s recorded an unemployment rate of less than 5.0 per cent while 10.4 per cent of SA2s recorded an unemployment rate of 10.0 per cent or more.

Next issue

It is anticipated that the June quarter 2020 issue of SALM will be released in late September 2020.

Contact details

This report was prepared by the Labour Market Analysis and Advice Section within the Labour Market Research and Analysis Branch. For further information, please contact Joel Meehan on (02) 6240 5358 or Andrew Gatenby on (02) 6240 9130, or email the SALM inbox at SALM@skillscommission.gov.au.